Economics game
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I was just reminded of an economics games that we played in 'A' level economics. You split into four teams to produce the same product which costs £1 per unit and cannot be stockpiled; you can charge between £0 and £10 for the product and make between 0 and 10 units per year. Each year there were different economic conditions so one year there might be a market for 20 units and in another 5 units; but each producer was guaranteed to sell at least one unit. And what always happens in that teams at the extremes succeed and the majority who decide to make a mid range number of units at a mid range price fail! The reason why this happened was because the mid players were fine if they knew the market in advance, as soon as the game was changed and you were told in year 4 that the expected market of 20 had collapsed to 10 only the teams at the extremes remained remotely profitable. Example, expected market 20 units Team A: produce 10 sell at 2 Team B: produce 6 sell at 5 Team C: produce 5 sell at 6 Team D: produce 1 sell at 10 If there is a market for 20 everyone is OK; A makes £10, B makes £24, C makes £13 and D makes £9. But in an unexpected market collapse to 10 units A makes £4, D still makes £9 but B now loses £1 and C only makes £1 profit. When the cost price rises the hit to the mid market players of a slowdown is even more catastrophic. You know I might write a little application this afternoon to model this - would that be enough for a code project article?
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
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I was just reminded of an economics games that we played in 'A' level economics. You split into four teams to produce the same product which costs £1 per unit and cannot be stockpiled; you can charge between £0 and £10 for the product and make between 0 and 10 units per year. Each year there were different economic conditions so one year there might be a market for 20 units and in another 5 units; but each producer was guaranteed to sell at least one unit. And what always happens in that teams at the extremes succeed and the majority who decide to make a mid range number of units at a mid range price fail! The reason why this happened was because the mid players were fine if they knew the market in advance, as soon as the game was changed and you were told in year 4 that the expected market of 20 had collapsed to 10 only the teams at the extremes remained remotely profitable. Example, expected market 20 units Team A: produce 10 sell at 2 Team B: produce 6 sell at 5 Team C: produce 5 sell at 6 Team D: produce 1 sell at 10 If there is a market for 20 everyone is OK; A makes £10, B makes £24, C makes £13 and D makes £9. But in an unexpected market collapse to 10 units A makes £4, D still makes £9 but B now loses £1 and C only makes £1 profit. When the cost price rises the hit to the mid market players of a slowdown is even more catastrophic. You know I might write a little application this afternoon to model this - would that be enough for a code project article?
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
I would just check the arithmatic first!
[ftw]melvin wrote:
Team C: produce 5 sell at 6
[ftw]melvin wrote:
C makes £13
5 units at £6 per unit is £30, less costs of £5 = £25 That is a 500% Profit
------------------------------------ Credit is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay. - Charles Dickens
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I was just reminded of an economics games that we played in 'A' level economics. You split into four teams to produce the same product which costs £1 per unit and cannot be stockpiled; you can charge between £0 and £10 for the product and make between 0 and 10 units per year. Each year there were different economic conditions so one year there might be a market for 20 units and in another 5 units; but each producer was guaranteed to sell at least one unit. And what always happens in that teams at the extremes succeed and the majority who decide to make a mid range number of units at a mid range price fail! The reason why this happened was because the mid players were fine if they knew the market in advance, as soon as the game was changed and you were told in year 4 that the expected market of 20 had collapsed to 10 only the teams at the extremes remained remotely profitable. Example, expected market 20 units Team A: produce 10 sell at 2 Team B: produce 6 sell at 5 Team C: produce 5 sell at 6 Team D: produce 1 sell at 10 If there is a market for 20 everyone is OK; A makes £10, B makes £24, C makes £13 and D makes £9. But in an unexpected market collapse to 10 units A makes £4, D still makes £9 but B now loses £1 and C only makes £1 profit. When the cost price rises the hit to the mid market players of a slowdown is even more catastrophic. You know I might write a little application this afternoon to model this - would that be enough for a code project article?
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
In the real world, there is no guarantee that you will sell at least 1 product. In the real world, assuming the products are identical, if the market unexpectedly drops to 10, all the buyers would all buy from A, as they are offering the cheapest, so all of the other companies would make a loss. In the real world though, there are supplier agreements, alternative benefits, contracts and so on, that influence a buyers decision of who to buy from, they don't always pick the cheapest. (Would still be very interested to see the app model though. Definitely do that thing)
Simon
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In the real world, there is no guarantee that you will sell at least 1 product. In the real world, assuming the products are identical, if the market unexpectedly drops to 10, all the buyers would all buy from A, as they are offering the cheapest, so all of the other companies would make a loss. In the real world though, there are supplier agreements, alternative benefits, contracts and so on, that influence a buyers decision of who to buy from, they don't always pick the cheapest. (Would still be very interested to see the app model though. Definitely do that thing)
Simon
I would keep the £5 development cost, and buy one from the cheapest, and sell it at the highest price. Repeat until rich.
------------------------------------ Credit is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay. - Charles Dickens
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I would just check the arithmatic first!
[ftw]melvin wrote:
Team C: produce 5 sell at 6
[ftw]melvin wrote:
C makes £13
5 units at £6 per unit is £30, less costs of £5 = £25 That is a 500% Profit
------------------------------------ Credit is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay. - Charles Dickens
true but Team A: produce 10 sell at 2 Team B: produce 6 sell at 5 Team C: produce 5 sell at 6 Team D: produce 1 sell at 10 total produced = 22 and there is only market for 20 so someone loses units but even then it doesn't fit 5-2= 3 at £6 = £18 - £3 = £15
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true but Team A: produce 10 sell at 2 Team B: produce 6 sell at 5 Team C: produce 5 sell at 6 Team D: produce 1 sell at 10 total produced = 22 and there is only market for 20 so someone loses units but even then it doesn't fit 5-2= 3 at £6 = £18 - £3 = £15
There is an assumption that C is the one to lose. There is an assumption that they are made all together, and not to order. There is an assumption that investment capital cannot be spread. There is an assumption that they are producing individually. There is an assumption that they are not one and the same company selling to different market strata.
------------------------------------ Credit is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay. - Charles Dickens
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There is an assumption that C is the one to lose. There is an assumption that they are made all together, and not to order. There is an assumption that investment capital cannot be spread. There is an assumption that they are producing individually. There is an assumption that they are not one and the same company selling to different market strata.
------------------------------------ Credit is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay. - Charles Dickens
All true, I guess his game doesn't really translate to the real world.
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I would just check the arithmatic first!
[ftw]melvin wrote:
Team C: produce 5 sell at 6
[ftw]melvin wrote:
C makes £13
5 units at £6 per unit is £30, less costs of £5 = £25 That is a 500% Profit
------------------------------------ Credit is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay. - Charles Dickens
I intend to get one of these ^%$&%$ computer things to do the maths! Anyway the market in the example was for 20 units, A sold 10, B sold 6, D sold 1 and this left a market of only 3 for C. Revenue 3 x 6 = £18, costs 5 x £1 = £5, profit = £13. If the market had been 22 units then yes C would have made £25.
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
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true but Team A: produce 10 sell at 2 Team B: produce 6 sell at 5 Team C: produce 5 sell at 6 Team D: produce 1 sell at 10 total produced = 22 and there is only market for 20 so someone loses units but even then it doesn't fit 5-2= 3 at £6 = £18 - £3 = £15
They still made 5 and they couldn't stockpile. So the costs were £5. £18 - £5 = £13.
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
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All true, I guess his game doesn't really translate to the real world.
At the moment the banking system and the stock market don't translate into the real world either!
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
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They still made 5 and they couldn't stockpile. So the costs were £5. £18 - £5 = £13.
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
right my mistake, but still Dalek's answer to my post (with all the assumtions in it) still holds. how do you know that it was c that didn't sell all of there units and not one of the others (or 2)
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At the moment the banking system and the stock market don't translate into the real world either!
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
True, unfortanatly they are in the real world :sigh:
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right my mistake, but still Dalek's answer to my post (with all the assumtions in it) still holds. how do you know that it was c that didn't sell all of there units and not one of the others (or 2)
Everyone's guaranteed to sell 1, but the rest are allocated by price (sorry I didn't make that assumption public). So A and B max out, D only has one to sell and so C is squeezed.
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
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In the real world, there is no guarantee that you will sell at least 1 product. In the real world, assuming the products are identical, if the market unexpectedly drops to 10, all the buyers would all buy from A, as they are offering the cheapest, so all of the other companies would make a loss. In the real world though, there are supplier agreements, alternative benefits, contracts and so on, that influence a buyers decision of who to buy from, they don't always pick the cheapest. (Would still be very interested to see the app model though. Definitely do that thing)
Simon
Simon Stevens wrote:
(Would still be very interested to see the app model though. Definitely do that thing)
Thanks for the encouragement - I usually do web apps, but this seems more obviously a desktop app; any preference? BTW I do have a few minutes spare as all I'm doing is writing handover notes for my replacement (not yet recruited) ahead of my April 2009 redundancy (due to office relocation). I need to code something soon!
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
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Everyone's guaranteed to sell 1, but the rest are allocated by price (sorry I didn't make that assumption public). So A and B max out, D only has one to sell and so C is squeezed.
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
ah k in that case it holds up But (and this is mearly an observation and could be completly wrong, economics never was my best area), isn't is so that usually if (to simplify) 3 company's sell the same product at differant prices, people are more drawn to the higher prices, since lower price often means (or so the people think) lower quality so if: company A sells at 2 company B sells at 5 company C sells at 8 wouldn't company A be the least likly to sell all off its units? Once again I'm not an expert so I could be wrong, just an observation I've come to over the years.
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Simon Stevens wrote:
(Would still be very interested to see the app model though. Definitely do that thing)
Thanks for the encouragement - I usually do web apps, but this seems more obviously a desktop app; any preference? BTW I do have a few minutes spare as all I'm doing is writing handover notes for my replacement (not yet recruited) ahead of my April 2009 redundancy (due to office relocation). I need to code something soon!
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
[ftw]melvin wrote:
I usually do web apps, but this seems more obviously a desktop app; any preference?
Well, the article seems like it would be more about the model and nature of the outcomes rather than any programming technique, so I don't think the framework really matters. That said, it does seem to lend itself more easily to a desktop app.
[ftw]melvin wrote:
I do have a few minutes spare as all I'm doing is writing handover notes for my replacement (not yet recruited) ahead of my April 2009 redundancy (due to office relocation).
Are you kidding!? If I knew I was being made redundant I wouldn't be writing docs for my replacement without a freaking huge pay-off.
Simon
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Simon Stevens wrote:
(Would still be very interested to see the app model though. Definitely do that thing)
Thanks for the encouragement - I usually do web apps, but this seems more obviously a desktop app; any preference? BTW I do have a few minutes spare as all I'm doing is writing handover notes for my replacement (not yet recruited) ahead of my April 2009 redundancy (due to office relocation). I need to code something soon!
"If you reward everyone, there will not be enough to go around, so you offer a reward to one in order to encourage everyone." Mei Yaochen in the 'Doing Battle' section of Sun Tzu's: Art of War. .
I'd be interested in seeing how this pans out. :)
Cheers, Vıkram.
"You idiot British surprise me that your generators which grew up after Mid 50s had no brain at all." - Adnan Siddiqi.