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Pricing Strategies and Competition: A Game Theoretic Analysis
Subject area: Management and Commerce · Area of research: Economics
Abstract
The research investigates pricing strategies and competitive behaviors in oligopolistic structures and monopolistically competitive environments through a Kenyan market analysis. The research studies firm strategic interactions stemming from pricing decisions, using both classical and modern game theory models, such as the Bertrand, Cournot, and Stackelberg frameworks, as well as mixed strategy equilibria. The research examines price adjustments through case analysis from Kenya?s airline industry, combined with the telecommunications sector. The research explores two main pricing strategies: limit pricing and predatory pricing, as well as bundling and price discrimination. The study provides relevant knowledge to policymakers about how theoretical analysis supports the detection of systems and competition promotion through proper regulatory frameworks. The paper demonstrates how game theory provides organizations with advanced capabilities to build better strategies and market positioning in genuine marketplace environments.
Keywords
Game Theory, Pricing Strategies, Competition, Kenyan Market, Oligopoly
References
[1] Belleflamme, P., & Peitz, M. (2015). Industrial Organization: Markets and Strategies. Cambridge-University Press. https://www.cambridge.org/core/books/industria lorganization/967278AF52FCB74B35DB29980 73A81E9
[2] Cabral, L. (2017). Introduction to Industrial Organization. MIT Press. press/11212.001.0001
[3] Carlton, D. W., & Perloff, J. M. (2015). Modern Industrial Organization. Pearson.https://www.pearson.com/store/p/mode rn-industrial-organization/P100000236733
[4] Communications Authority of Kenya (2011). Annual Report 2010/2011. https://ca.go.ke/wp- content/uploads/2020/02/Annual-Report-2010- 2011.pdf
[5] Communications Authority of Kenya (2019). Sector Statistics Report Q4. https://www.ca.go.ke/wpcontent/uploads/2019/0 9/Sector-Statistics-Report-Q4-2018-2019.pdf.
[6] Competition Authority of Kenya (CAK) (2019). Annual Report 2018/2019. https://www.cak.go.ke/sites/default/files/Annual %20Report%202018-2019.pdf
[7] Kenya Civil Aviation Authority (2021). Annual Aviation-Report-2020/2021. https://www.kcaa.or.ke/sites/default/files/Annua l_Aviation_Report_2020-2021.pdf
[8] Ndung’u, N. (2021). “COVID-19 and the Mobile Money Revolution in Kenya.” Brookings Institution. https://www.brookings.edu/articles/covid-19- and-the-mobile-money-revolution-in-kenya/
[9] Osborne, M. J., & Rubinstein, A. (1994). A Course in Game Theory. MIT Press. https://mitpress.mit.edu/9780262650403/a- course-in-game-theory/
[10] Tirole, J. (1988). The Theory of Industrial Organization. MIT Press. https://mitpress.mit.edu/9780262200714/the- theory-of-industrial-organization/
[11] Transport Research Board (2020). Pricing Structures in East African Aviation. U.S. National Academies Transportation Research Board. https://www.trb.org
How to cite this paper
@article{1708913,
author = {Stephen Asiago Orina, Dr. Yasin Ghabon},
title = {Pricing Strategies and Competition: A Game Theoretic Analysis},
journal = {Iconic Research And Engineering Journals},
year = {2025},
volume = {8},
number = {12},
pages = {586-592},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1708913.pdf},
abstract = {The research investigates pricing strategies and competitive behaviors in oligopolistic structures and monopolistically competitive environments through a Kenyan market analysis. The research studies firm strategic interactions stemming from pricing decisions, using both classical and modern game theory models, such as the Bertrand, Cournot, and Stackelberg frameworks, as well as mixed strategy equilibria. The research examines price adjustments through case analysis from Kenya?s airline industry, combined with the telecommunications sector. The research explores two main pricing strategies: limit pricing and predatory pricing, as well as bundling and price discrimination. The study provides relevant knowledge to policymakers about how theoretical analysis supports the detection of systems and competition promotion through proper regulatory frameworks. The paper demonstrates how game theory provides organizations with advanced capabilities to build better strategies and market positioning in genuine marketplace environments.},
keywords = {Game Theory, Pricing Strategies, Competition, Kenyan Market, Oligopoly},
month = {June},
}