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MS-182 Cournot Competition for Market Entry v05

[Market Simulation] MS-182 Cournot Competition for Market Entry
Market Simulation (MS-182) - Cournot Competition for Market EntryShows how a new Competitor to the Market could use a Cournot CompetititonModel to optimize both Production Capacity then Price. Cournot Competitionis used when a Competitor would first set their Output Capacity and then settheir Profit Maximizing Price.See also: Building Blocks (BB-141) Three CompetitorsSee also: Building Blocks (BB-171) Bertrand Competition Competitive Story:Having (again) been fired from his job at Spacely Sprockets by Cosmo Spacely,George Jetson starts his own company called 'Jetson Gears'. He decides to use aCournot Competition Model to find the best combination of Production Capacityand Price that will maximize his Profitability.In this Market Simulation, George Jetson uses (Step 1) a Tuning Loop to set thetest Production Capacity for his Gears (between 1000 and 3000 units). ThenGeorge Jetson uses (Step 2) the 'Price Maximize' node to calculate the ProfitMaximizing Price. Finally, George Jetson chooses the combined Quantity + Priceresult that returns the maximum possible Profit. Profitability increases with Test-Capacity up until the totalpossible Profit is maximized. Test-Capacity continues toincrease even after the Quantity-Sold at the Profit-Maximizing-Price remains constant, leavingunused excess Capacity. The Profit-Maximizing-Pricedecreases as Test-Capacity andQuantity-Sold increases untiltotal possible Profit ismaximized. Step 1: The 'Tuning Loop' williterate through all of the possibleproduction Capacity limitiationsfor Jetson Gears. Step 2: The 'Price Maximize' nodewill calculate the Profit-Maximizing-Price for JetsonGears given their Test-Capacitylimitations. Define the Competitiveenvironment of the incumbants:'Spacely Sprockets' and'Cogswell Cogs'. Product Correlations define howsimilar and substitutable each ofthe Products are with respect tothe other Competitors in theMarket.CompetitiveProductsProductCorrelationsHorizontalDifferentiationCustomerWTPMatrixSet Jetson GearsTest-CapacitySet Jetson GearsTest-CapacitySet Profit-Maximizing-Priceat given Test-CapacitySet NextTest-CapacityCleanResultsSelectJetson GearsResultsRenameJetson GearsResultsStep #1 SetTest-CapacityStep #2 SetProfit-Maximizing-PriceRevenue at Test-Capacity andProfit-Maximizing-PriceProfit at Test-Capacity andProfit-Maximizing-Price Table Creator Table Creator CorrelationPairs To Matrix MatrixDistributions Tuning Loop Start Java Snippet Price Maximize Loop End Column Filter Row Splitter Column Rename(Regex) Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart) Market Simulation (MS-182) - Cournot Competition for Market EntryShows how a new Competitor to the Market could use a Cournot CompetititonModel to optimize both Production Capacity then Price. Cournot Competitionis used when a Competitor would first set their Output Capacity and then settheir Profit Maximizing Price.See also: Building Blocks (BB-141) Three CompetitorsSee also: Building Blocks (BB-171) Bertrand Competition Competitive Story:Having (again) been fired from his job at Spacely Sprockets by Cosmo Spacely,George Jetson starts his own company called 'Jetson Gears'. He decides to use aCournot Competition Model to find the best combination of Production Capacityand Price that will maximize his Profitability.In this Market Simulation, George Jetson uses (Step 1) a Tuning Loop to set thetest Production Capacity for his Gears (between 1000 and 3000 units). ThenGeorge Jetson uses (Step 2) the 'Price Maximize' node to calculate the ProfitMaximizing Price. Finally, George Jetson chooses the combined Quantity + Priceresult that returns the maximum possible Profit. Profitability increases with Test-Capacity up until the totalpossible Profit is maximized. Test-Capacity continues toincrease even after the Quantity-Sold at the Profit-Maximizing-Price remains constant, leavingunused excess Capacity. The Profit-Maximizing-Pricedecreases as Test-Capacity andQuantity-Sold increases untiltotal possible Profit ismaximized. Step 1: The 'Tuning Loop' williterate through all of the possibleproduction Capacity limitiationsfor Jetson Gears. Step 2: The 'Price Maximize' nodewill calculate the Profit-Maximizing-Price for JetsonGears given their Test-Capacitylimitations. Define the Competitiveenvironment of the incumbants:'Spacely Sprockets' and'Cogswell Cogs'. Product Correlations define howsimilar and substitutable each ofthe Products are with respect tothe other Competitors in theMarket.CompetitiveProductsProductCorrelationsHorizontalDifferentiationCustomerWTPMatrixSet Jetson GearsTest-CapacitySet Jetson GearsTest-CapacitySet Profit-Maximizing-Priceat given Test-CapacitySet NextTest-CapacityCleanResultsSelectJetson GearsResultsRenameJetson GearsResultsStep #1 SetTest-CapacityStep #2 SetProfit-Maximizing-PriceRevenue at Test-Capacity andProfit-Maximizing-PriceProfit at Test-Capacity andProfit-Maximizing-PriceTable Creator Table Creator CorrelationPairs To Matrix MatrixDistributions Tuning Loop Start Java Snippet Price Maximize Loop End Column Filter Row Splitter Column Rename(Regex) Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart) Line Chart(JFreeChart)

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Created by: Berlin
Created at: 2018-10-22
On NodePit since: 2021-02-05
Last update: 2024-11-21
Created with KNIME version: v4.3.0

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