📅 2024-09-06 — Session: Game Theory Setup and Profit Analysis for Competitive Pricing
🕒 22:50–23:20
🏷️ Labels: Game Theory, Competitive Pricing, Profit Analysis, Python, Economics
📂 Project: Business
⭐ Priority: MEDIUM
Session Goal
The session aimed to set up a game theory model for competitive pricing between two companies and analyze their profit functions using mixed strategies.
Key Activities
- Outlined the setup for a competitive pricing game involving two companies, detailing their price ranges and associated probabilities.
- Developed profit functions for companies in a price competition scenario, considering outcomes of winning, losing, or tying.
- Calculated expected profits using mixed strategies and probabilities of winning or losing.
- Integrated profit functions over price ranges for low-cost and high-cost companies.
- Corrected probability functions for uniform distribution and plotted them using Python.
- Plotted expected profits for companies based on defined price ranges and profit functions.
Achievements
- Successfully set up a foundational game theory model for competitive pricing.
- Developed and corrected Python code for probability functions and plotting.
- Calculated and visualized expected profits for different company cost structures.
Pending Tasks
- Further refine the profit analysis model to incorporate more complex pricing strategies and market conditions.