Pricing decision analysis for two differentiated products based on game theory

2008 ◽  
Author(s):  
Jing Zhao ◽  
Jie Wei ◽  
Xiaochen Sun ◽  
Bowen Chen
Keyword(s):  
Game Theory ◽  
Decision Analysis ◽  
Differentiated Products ◽  
Pricing Decision

A Multidisciplinary Framework to Model Complex Team-Based Product Development

2015 ◽  
Author(s):  
Shun Takai
Keyword(s):  
Game Theory ◽  
Decision Making ◽  
Product Development ◽  
Decision Analysis ◽  
Equilibrium Analysis ◽  
Design Decision ◽  
Behavioral Game Theory ◽  
Model Complex ◽  
Behavioral Game ◽  
Team Project

This paper investigates a multidisciplinary framework that simulates design decisions in a complex team-based product development in which engineers simultaneously work in a team project and individual projects. The proposed framework integrates cooperative and noncooperative design models with (1) equilibrium analysis, (2) uncertainty modeling based on behavioral game-theory results, and (3) decision-making using decision analysis. In the proposed framework, noncooperative design is used to simulate engineers’ decisions about team project commitment and to analyze potential free-riding; cooperative design is used to model design outcomes when engineers collaborate in the team project; equilibrium analysis and behavioral game-theory results are used to infer about other engineers’ decisions; and decision analysis is used to calculate expected values of decision alternatives. The proposed framework and the design decision-making model are illustrated using a pressure vessel design as a team project conducted by two engineers: a design engineer and a materials engineer.

scholarly journals Exploring Relations Between Decision Analysis and Game Theory

2007 ◽  
Vol 4 (1) ◽  
pp. 32-40 ◽  
Author(s):  
Jules H. van Binsbergen ◽  
Leslie M. Marx
Keyword(s):  
Game Theory ◽  
Decision Analysis

scholarly journals Endogenous Price Leadership with Asymmetric Costs: Experimental Evidence

2019 ◽  
Vol 7 (1) ◽  
pp. 59-74
Author(s):  
Miguel A. Fonseca
Keyword(s):  
Experimental Evidence ◽  
High Frequency ◽  
Low Cost ◽  
Differentiated Products ◽  
Strategic Uncertainty ◽  
Price Leadership ◽  
Pricing Decision ◽  
Asymmetric Costs ◽  
Simultaneous Move

This paper presents experimental evidence on the action commitment game with cost-asymmetric firms in a differentiated-products Bertrand duopoly. Unlike its quantity-setting counterpart, the risk-dominant leader–follower equilibrium Pareto dominates the simultaneous-move equilibrium. This equilibrium also minimizes payoff differences between firms. Hence, one would expect the model to accurately capture behavior. The evidence partially supports the theory: low-cost firms price in the first period more often than high-cost firms, and depending on the treatment, between 40 and 57 per cent of all observations conform to equilibrium play. However, the modal timing outcome involved both firms delaying their pricing decision. This timing outcome is characterized by Nash play and some collusion. The high frequency of delaying decisions could be due to a desire to reduce strategic uncertainty.

A Multidisciplinary Framework to Model Complex Team-Based Product Development

2016 ◽  
Vol 138 (6) ◽  
Author(s):  
Shun Takai
Keyword(s):  
Game Theory ◽  
Decision Making ◽  
Product Development ◽  
Decision Analysis ◽  
Collaborative Design ◽  
Equilibrium Analysis ◽  
Design Decision ◽  
Behavioral Game Theory ◽  
Behavioral Game ◽  
Team Project

This paper investigates a multidisciplinary framework that simulates design decisions in a complex team-based product development in which engineers simultaneously work on a team project and individual projects. The proposed framework integrates collaborative design with (1) equilibrium analysis, (2) uncertainty modeling based on behavioral game-theory results, and (3) noncooperative decision making using decision analysis. In the proposed framework, noncooperative decision making is used to simulate engineers’ decisions about team-project commitment and to analyze potential free riding. Collaborative design is used to model design outcomes when engineers commit to the team project. Equilibrium analysis and behavioral game-theory results are used to infer uncertainty about other engineers’ decisions. Decision analysis is used to calculate expected values of decision alternatives. The proposed framework and the design decision making model are illustrated using a pressure vessel design as a team project conducted by two engineers: a design engineer and a materials engineer.

The Decision Analysis and Strategy for Reuse of Waste Materials Based on Game Theory under Asymmetry Information

2013 ◽  
Vol 448-453 ◽  
pp. 4449-4454
Author(s):  
Li Qian ◽  
Jian Guo Du ◽  
Shuai Jin
Keyword(s):  
Game Theory ◽  
Asymmetric Information ◽  
Decision Analysis ◽  
Cost Sharing ◽  
Main Product ◽  
Waste Materials ◽  
Price Strategy ◽  
Waste Reuse ◽  
Asymmetry Information

In order to explore the waste reuse problem, we establish waste reuse model composed of manufacturer1 which is a waste supplier and manufacturer 2 which is a waste buyer, when the information of recycling cost is symmetry and asymmetry. The paper gives the output and price strategy of main product under different conditions. The result shows manufacturer1 runs more risk when information of recycling cost is asymmetry. Therefore manufacturer1 needs to prevent risk associated with asymmetric information. This paper further gives manufacturer1’s cost sharing contract which reduces manufacturer1’s risk and increase profits.

Airbus and Boeing: Superjumbo Decisions

2017 ◽  
pp. 1-7
Author(s):  
Samuel E. Bodily ◽  
Kenneth C. Lichtendahl
Keyword(s):  
Game Theory ◽  
Decision Tree ◽  
Decision Analysis ◽  
Real Options ◽  
Subjective Probability ◽  
Development Effort ◽  
Probability Assessment ◽  
Final Exam ◽  
Modeling Simulation ◽  
Tree Modeling

Set in 1999, this case allows students to put themselves in the positions of both Airbus and Boeing as Boeing considered how to respond to Airbus's decision to announce its plans to proceed or not with the $10 billion development of the world's first commercial superjumbo jet, the Airbus A3XX. Boeing was considering a development effort to “stretch” its 747 jumbo jet into a larger superjumbo version, the 747-X. At the time, the two companies’ widely available 20-year forecasts for jumbo- and superjumbo-jet demand were particularly divergent. In light of this very public “agreement to disagree,” Boeing could pursue several alternatives, all of which were related to Airbus's decision about whether or not to develop the A3XX. This case presents an opportunity for students to make a real downstream decision. It was prepared as a final exam for an introductory decision analysis course involving subjective probability assessment, decision tree modeling, simulation, real options, and game theory. In the analysis of this case, a student is expected to utilize ideas from all five of these areas.

MARKETING DECISION ANALYSIS BY TURF AND SHAPLEY VALUE

2005 ◽  
Vol 04 (01) ◽  
pp. 5-19 ◽  
Author(s):  
W. MICHAEL CONKLIN ◽  
STAN LIPOVETSKY
Keyword(s):  
Game Theory ◽  
Decision Analysis ◽  
Marketing Strategy ◽  
Cooperative Game ◽  
Shapley Value ◽  
Cooperative Game Theory ◽  
Product Mix ◽  
Marketing Decision ◽  
The Shapley Value ◽  
Sample Proportion

We consider a problem of marketing decisions for the choice of a product with maximum customer appeal. A widely used technique for this purpose is TURF, or Total Unduplicated Reach and Frequency, which evaluates a union of the events defined by the sample proportion of many products, or flavors of one product. However, when using TURF, it is often impossible to distinguish between subsets of different flavor combinations with practically the same level of coverage. An appropriate tool can be borrowed from cooperative game theory, namely, the Shapley Value, that permits the ordering of flavors by their strength in achieving maximum consumers' reach and provides more stable results than TURF. We describe marketing strategy reasons for using these techniques in the identification of the preferred combinations in media or product mix.

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