Icon

MS-174 Bertrand Competition with Product Differentiation v05

[Market Simulation] MS-174 Bertrand Competition with Product Differentiation
Market Simulation (MS-174) - Bertrand Competition Product DifferentiationExplores the limitations of the Bertrand Competition Model when the Productsare no longer Commodities but have some degree of Differentiation from oneanother. 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. Alternative Product Generatorusing Correlation Matrix to setProduct Differentiation. Product Differentiation results ina pure-strategy Nash Equilibrium(unlike for Capacity Constraintsand Search Costs). Unlike other dynamiccompetition scenarios, theseCompetitors do not wish tochange Price so expectedQuantity equals actual Quantity. Prices remain above MarginalCosts. Customers buy theProduct which maximizes theirConsumer Surplus (even if moreexpensive).CompetitiveRivalsCorrelation Matrix= Product DifferentiationProductGeneratorProductArraySummaryDefine: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 VariablesDifferentiation =(1.0 - Correlation) Table Creator Table Creator MatrixDistributions 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 Linear Correlation Market Simulation (MS-174) - Bertrand Competition Product DifferentiationExplores the limitations of the Bertrand Competition Model when the Productsare no longer Commodities but have some degree of Differentiation from oneanother. 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. Alternative Product Generatorusing Correlation Matrix to setProduct Differentiation. Product Differentiation results ina pure-strategy Nash Equilibrium(unlike for Capacity Constraintsand Search Costs). Unlike other dynamiccompetition scenarios, theseCompetitors do not wish tochange Price so expectedQuantity equals actual Quantity. Prices remain above MarginalCosts. Customers buy theProduct which maximizes theirConsumer Surplus (even if moreexpensive).CompetitiveRivalsCorrelation Matrix= Product DifferentiationProductGeneratorProductArraySummaryDefine: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 VariablesDifferentiation =(1.0 - Correlation)Table Creator Table Creator MatrixDistributions 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 Linear Correlation

Nodes

Extensions

Links

Download

To use this workflow in KNIME, download it from the below URL and open it in KNIME:

Download Workflow
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

Deploy, schedule, execute, and monitor your KNIME workflows locally, in the cloud or on-premises – with our brand new NodePit Runner.

Try NodePit Runner!