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MS-173 Bertrand Competition with Search Costs v03

Workflow

[Market Simulation] MS-173 Bertrand Competition with Search Costs
[Market Simulation] MS-173 Bertrand Competition with Search Costs Explores another variation of Bertrand Competition. The Products in this Market are, again, undifferentiated Commodity Products, but there are Search Costs that limit Customer awareness of each Product. Uses the KNIME Extension: Market Simulation by Scientific Strategy - Community Edition A comprehensive description of this workflow with step-by-step instructions can be found at the Scientific Strategy website: https://scientificstrategy.com/ms-173/
Market Simulation (MS-173) - Bertrand Competition with Search CostsExplores another variation of Bertrand Competition. The Products in thisMarket are, again, undifferentiated Commodity Products. But in this case,there are Search Costs that limit Customer awareness of each Product. The Price Experiment loop willtest changing both the Spacelyand Cogswell Prices up anddown (while keeping theCompetitor's Price constant). Compare all of the Spacely Price Changes: (a)Raise Price, (b) Maintain Same Price, (c) LowerPrice. Then select the Price that maximizes short-term Profit (assuming the Competitor does notchange Price). Compare all of the Cogswell Price Changes: (a)Raise Price, (b) Maintain Same Price, (c) LowerPrice. Then select the Price that maximizes short-term Profit (assuming the Competitor does notchange Price). Collect together the new Priceschosen by both Competitors.These new Prices will bepassed back to the Loop Start. Only 20% chance the Customeris aware of both Products. There may exist no pure-strategyNash Equilibrium, but SearchCosts (as long as they arepervasive) help ensure thatProfits exist. Competitors each try raisingPrice to increase Profitabilityexpecting that the otherCompetitor will maintain Price. Prices are not driven down toMarginal Cost when there areSearch Costs and Competitorsoften are not aware of all theirchoices.CompetitiveRivalsWillingnessTo Pay (WTP)of CustomersProductArrayProductArraySummaryDefine:Spacely_PriceSpacely_CostCogswell_PriceCogswell_CostPrice_Change_PercentagePrice ExperimentLoop StartConvert Price / Costto Flow VariablesSet ProductCostsSet ProductPrice(No Change)Set ProductPrice(Raise Spacely)Set ProductPrice(Decrease Spacely)Set ProductPrice(Decrease Cogswell)Set ProductPrice(Raise Cogswell)WillingnessTo Pay (WTP)of CustomersRun PriceExperiment #1Run PriceExperiment #2Run PriceExperiment #3Run PriceExperiment #4Run PriceExperiment #5Spacely ResultsSpacely ResultsNo SaleResultsCogswell ResultsCogswell ResultsSpacely ResultsCogswell ResultsAll Spacely Results:(a) Increase Price(b) Same Price(c) Decrease PriceAll Cogswell Results:(a) Increase Price(b) Same Price(c) Decrease PriceSort byMaximum ProfitSort byMaximum ProfitSelectMaximum ProfitSelectMaximum ProfitSelect NewSpacely_PriceSelect NewCogswell_PriceRename NewSpacely_PriceSpacely_CostRename NewCogswell_PriceCogswell_CostSpacely_PriceSpacely_CostCogswell_PriceCogswell_CostPrice_ChangePercentagePrice ExperimentLoop End30 x IterationsTrack ExpectedResultsSpacely ResultsCogswell ResultsSpacely ResultsCogswell ResultsSpacely ResultsCogswell ResultsActualPrice TrendExpectedQuantity TrendExpectedRevenue TrendExpectedProfit TrendIntroduceSearch Costs40% = Spacely Sprockets40% = Cogswell Cogs20% = Aware of Both Table Creator CustomerDistributions Product Generator Column Filter Table Creator RecursiveLoop Start Table Rowto Variable Java Snippet Java Snippet Java Snippet Java Snippet Java Snippet Java Snippet Column Filter Simulate Market Simulate Market Simulate Market Simulate Market Simulate Market Row Splitter Row Splitter Row Splitter Row Splitter Row Splitter Row Splitter Concatenate(Optional in) Concatenate(Optional in) Sorter Sorter Row Filter Row Filter Column Filter Column Filter Column Rename Column Rename Column Appender ConstantValue Column Recursive Loop End Concatenate Row Splitter Column Rename(Regex) Column Rename(Regex) Column Appender Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart) Demand Shredder GroupBy Market Simulation (MS-173) - Bertrand Competition with Search CostsExplores another variation of Bertrand Competition. The Products in thisMarket are, again, undifferentiated Commodity Products. But in this case,there are Search Costs that limit Customer awareness of each Product. The Price Experiment loop willtest changing both the Spacelyand Cogswell Prices up anddown (while keeping theCompetitor's Price constant). Compare all of the Spacely Price Changes: (a)Raise Price, (b) Maintain Same Price, (c) LowerPrice. Then select the Price that maximizes short-term Profit (assuming the Competitor does notchange Price). Compare all of the Cogswell Price Changes: (a)Raise Price, (b) Maintain Same Price, (c) LowerPrice. Then select the Price that maximizes short-term Profit (assuming the Competitor does notchange Price). Collect together the new Priceschosen by both Competitors.These new Prices will bepassed back to the Loop Start. Only 20% chance the Customeris aware of both Products. There may exist no pure-strategyNash Equilibrium, but SearchCosts (as long as they arepervasive) help ensure thatProfits exist. Competitors each try raisingPrice to increase Profitabilityexpecting that the otherCompetitor will maintain Price. Prices are not driven down toMarginal Cost when there areSearch Costs and Competitorsoften are not aware of all theirchoices.CompetitiveRivalsWillingnessTo Pay (WTP)of CustomersProductArrayProductArraySummaryDefine:Spacely_PriceSpacely_CostCogswell_PriceCogswell_CostPrice_Change_PercentagePrice ExperimentLoop StartConvert Price / Costto Flow VariablesSet ProductCostsSet ProductPrice(No Change)Set ProductPrice(Raise Spacely)Set ProductPrice(Decrease Spacely)Set ProductPrice(Decrease Cogswell)Set ProductPrice(Raise Cogswell)WillingnessTo Pay (WTP)of CustomersRun PriceExperiment #1Run PriceExperiment #2Run PriceExperiment #3Run PriceExperiment #4Run PriceExperiment #5Spacely ResultsSpacely ResultsNo SaleResultsCogswell ResultsCogswell ResultsSpacely ResultsCogswell ResultsAll Spacely Results:(a) Increase Price(b) Same Price(c) Decrease PriceAll Cogswell Results:(a) Increase Price(b) Same Price(c) Decrease PriceSort byMaximum ProfitSort byMaximum ProfitSelectMaximum ProfitSelectMaximum ProfitSelect NewSpacely_PriceSelect NewCogswell_PriceRename NewSpacely_PriceSpacely_CostRename NewCogswell_PriceCogswell_CostSpacely_PriceSpacely_CostCogswell_PriceCogswell_CostPrice_ChangePercentagePrice ExperimentLoop End30 x IterationsTrack ExpectedResultsSpacely ResultsCogswell ResultsSpacely ResultsCogswell ResultsSpacely ResultsCogswell ResultsActualPrice TrendExpectedQuantity TrendExpectedRevenue TrendExpectedProfit TrendIntroduceSearch Costs40% = Spacely Sprockets40% = Cogswell Cogs20% = Aware of BothTable Creator CustomerDistributions Product Generator Column Filter Table Creator RecursiveLoop Start Table Rowto Variable Java Snippet Java Snippet Java Snippet Java Snippet Java Snippet Java Snippet Column Filter Simulate Market Simulate Market Simulate Market Simulate Market Simulate Market Row Splitter Row Splitter Row Splitter Row Splitter Row Splitter Row Splitter Concatenate(Optional in) Concatenate(Optional in) Sorter Sorter Row Filter Row Filter Column Filter Column Filter Column Rename Column Rename Column Appender ConstantValue Column Recursive Loop End Concatenate Row Splitter Column Rename(Regex) Column Rename(Regex) Column Appender Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart) Demand Shredder GroupBy

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Nodes

MS-173 Bertrand Competition with Search Costs v03 consists of the following 49 nodes(s):

Plugins

MS-173 Bertrand Competition with Search Costs v03 contains nodes provided by the following 4 plugin(s):