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eMarkets Projects
Web-Based Dynamic Pricing Game
Faculty: Itir Karaesmen
Students: Inbal Yahav, Gisela Bardossi
In this project a game/simulation was developed where players take the role
of a pricing/sales manager at an online retailer and make pricing decisions for
a product over time. The game is designed to mimic the sales, operations and
decisions of an online retailer, albeit in a simplified setting. The retailer
observes the inquiries for the product as well as purchases made. The retailer
has the ability to change prices quickly and freely at no cost at any time. The
only decision to be made by the players (retailer) is the price of the product
at any point in time.
The web-based game is designed such that the instructor controls the input
parameters of the game where the main inputs characterize the market demand
(which affects both the number of inquiries and also the sales), the amount of
supply, and the length of the sales horizon. There are currently four versions
of the game. These versions differ based on the amount of demand information
disclosed to the players (market information disclosed vs. no market information
is provided) and the amount of supply available (finite vs. infinite). In the
finite-supply version of the game, the players become familiar with the
trade-off between remaining time and amount of stock remaining. Pricing
optimization is challenging in this version. In the no-market-information
version, the players are faced with the trade-off between experimenting with
prices to gather market information and using the gathered information to set an
effective (if not optimal) price for the product. The game is currently used in
BUDT 775 Pricing and Revenue Management elective. Different versions of the game
can be used in Microeconomics, Marketing, Statistics and Operations courses in
the MBA curriculum.
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