Pricing of shared-parking lot : an application of Hotelling model

Abstract

Shared-parking lot brings utilization improvement, but also has its disadvantage compared with traditional parking lot while they are competing for public users. In the market including both shared-parking lot and traditional parking lot, parking lot operators need to know how to deal with parking price to be competitive in the market. The Hotelling model is applied in this paper to study the product differentiation of traditional parking lot and shared-parking lot, with some equilibrium analyses to figure out equilibrium parking prices of both parking lots while considering their competition in the market. Two points of indifferent consumers exist in the competition of the traditional parking lot and the shared- parking lot.