next up previous
Next: Pricing Strategies Up: Shopbot Economics Previous: Analysis

Simulations

 

The game-theoretic analysis of the previous section allowed for the possibility that not all buyers would avail themselves of information about all sellers' prices. By the same token, we can hardly expect that all sellers will simply compute the game-theoretic equilibrium as derived and set their prices accordingly. In order to compute this equilibrium, sellers are required to have perfect knowledge of the buyer demand function, and they must know that all other sellers have equivalent knowledge. In addition, they must know and trust that all other sellers use the game-theoretic pricing strategy. Finally, even if the sellers could independently compute the equilibrium, the computation is silent on the question of which one of the sellers is designated to play the low price solution. In this section, we present the results of simulations of various adaptive pricing strategies, and we describe the relationship between the resulting price and profit dynamics and the game-theoretic equilibrium.





Jeff Kephart
Fri Oct 16 11:05:57 EDT 1998