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MS-171 Bertrand Competition v05

[Market Simulation] MS-171 Bertrand Competition
Market Simulation (MS-171) - Bertrand CompetitionSimulates Bertrand Competition between Commodity Products where each ofthe two Competitors are experimenting by raising and lowering Price tomaximize their short-term Profit.The Market Simulation runs 5 Price Experiments each Loop Iteration: #1 Spacely Raises Price #2 Spacely Lowers Price #3 No Price Changes #4 Cogswell Raises Price #5 Cogswell Lowers Price Both Spacely Sprockets andCogswell Cogs sell identicalcommodity "Sprocket" Products. 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. Selecting the short-term ProfitMaximizing Prices results in thePrices of both Competitors beingdriven down to Marginal Cost. At the end of each iteration, bothCompetitors expect to win all ofthe Customers in the Market. Revenue is expected to remainhigh even as the Priceapproaches Marginal Cost. Notethat actual Revenue will be halfof expected Revenue. As Price is driven towardsMarginal Cost, the Profit of bothCompetitors is driven to zero.CompetitiveRivalsWillingnessTo Pay (WTP)of CustomersProductArrayProductArraySummaryDefine Starting Variables:Spacely_PriceSpacely_CostCogswell_PriceCogswell_CostPrice_Change_PercentagePrice ExperimentLoop StartSet 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 ResultsSort byMaximum ProfitSort byMaximum ProfitSelectMaximum ProfitSelectMaximum ProfitSelect NewSpacely_PriceSelect NewCogswell_PriceRename NewSpacely_PriceSpacely_CostRename NewCogswell_PriceCogswell_CostPrice_ChangePercentagePrice ExperimentLoop End30 x IterationsTrack ExpectedResultsSpacely ResultsCogswell ResultsSpacely ResultsCogswell ResultsActualPrice TrendExpectedQuantity TrendExpectedRevenue TrendExpectedProfit TrendSpacely ResultsCogswell ResultsSpacely_PriceSpacely_CostCogswell_PriceCogswell_CostAll Spacely Results:(a) Increase Price(b) Same Price(c) Decrease PriceAll Cogswell Results:(a) Increase Price(b) Same Price(c) Decrease PriceConvert Price / Costto Flow Variables Table Creator CustomerDistributions Product Generator Column Filter Table Creator RecursiveLoop Start 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 Sorter Sorter Row Filter Row Filter Column Filter Column Filter Column Rename Column Rename ConstantValue Column Recursive Loop End Concatenate Row Splitter Column Rename(Regex) Column Rename(Regex) Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart) Column Appender Column Appender Concatenate Concatenate Table Rowto Variable Market Simulation (MS-171) - Bertrand CompetitionSimulates Bertrand Competition between Commodity Products where each ofthe two Competitors are experimenting by raising and lowering Price tomaximize their short-term Profit.The Market Simulation runs 5 Price Experiments each Loop Iteration: #1 Spacely Raises Price #2 Spacely Lowers Price #3 No Price Changes #4 Cogswell Raises Price #5 Cogswell Lowers Price Both Spacely Sprockets andCogswell Cogs sell identicalcommodity "Sprocket" Products. 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. Selecting the short-term ProfitMaximizing Prices results in thePrices of both Competitors beingdriven down to Marginal Cost. At the end of each iteration, bothCompetitors expect to win all ofthe Customers in the Market. Revenue is expected to remainhigh even as the Priceapproaches Marginal Cost. Notethat actual Revenue will be halfof expected Revenue. As Price is driven towardsMarginal Cost, the Profit of bothCompetitors is driven to zero.CompetitiveRivalsWillingnessTo Pay (WTP)of CustomersProductArrayProductArraySummaryDefine Starting Variables:Spacely_PriceSpacely_CostCogswell_PriceCogswell_CostPrice_Change_PercentagePrice ExperimentLoop StartSet 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 ResultsSort byMaximum ProfitSort byMaximum ProfitSelectMaximum ProfitSelectMaximum ProfitSelect NewSpacely_PriceSelect NewCogswell_PriceRename NewSpacely_PriceSpacely_CostRename NewCogswell_PriceCogswell_CostPrice_ChangePercentagePrice ExperimentLoop End30 x IterationsTrack ExpectedResultsSpacely ResultsCogswell ResultsSpacely ResultsCogswell ResultsActualPrice TrendExpectedQuantity TrendExpectedRevenue TrendExpectedProfit TrendSpacely ResultsCogswell ResultsSpacely_PriceSpacely_CostCogswell_PriceCogswell_CostAll Spacely Results:(a) Increase Price(b) Same Price(c) Decrease PriceAll Cogswell Results:(a) Increase Price(b) Same Price(c) Decrease PriceConvert Price / Costto Flow VariablesTable Creator CustomerDistributions Product Generator Column Filter Table Creator RecursiveLoop Start 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 Sorter Sorter Row Filter Row Filter Column Filter Column Filter Column Rename Column Rename ConstantValue Column Recursive Loop End Concatenate Row Splitter Column Rename(Regex) Column Rename(Regex) Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart) Column Appender Column Appender Concatenate Concatenate Table Rowto Variable

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Created by: Berlin
Created at: 2018-10-18
On NodePit since: 2021-02-05
Last update: 2024-04-27
Created with KNIME version: v4.3.0

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