Event Title

Session 2F: Computational Market Modeling for Wireless Services

Session Number

Session 2F: 1st Presentation

Advisor(s)

Dr. Randall Berry and Ermin Wei, Northwestern University

Location

Room A113

Start Date

26-4-2018 10:35 AM

End Date

26-4-2018 11:20 AM

Abstract

In the economics world, companies seek to make the most profit from their product sales. When competing companies announce their prices, consumers instantly join the more beneficial company. However, if the effective cost of the product is more than customers are willing to pay, less of the product will be sold. Wireless network providers have strategies in play when selling their products, and these strategies are analyzed in terms of profit and consumer well-being. Using model market scenarios in Python and game theory strategies presented by each competitor, one can simulate the quality of data service received by each consumer and reach a best response for each company regarding profit and consumer well-being. The Bertrand Competition model allows one to predict the equilibrium price reached by two independent companies seeking their own self-interest, accounting for the decrease in demand due to congestion, the overcrowding of users. Using such a model created through python code, we investigated the changes in equilibrium price reached by both companies with changes in the parameters of the demand curve, effects of congestion, and the customer’s valuation of price over congestion.

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Apr 26th, 10:35 AM Apr 26th, 11:20 AM

Session 2F: Computational Market Modeling for Wireless Services

Room A113

In the economics world, companies seek to make the most profit from their product sales. When competing companies announce their prices, consumers instantly join the more beneficial company. However, if the effective cost of the product is more than customers are willing to pay, less of the product will be sold. Wireless network providers have strategies in play when selling their products, and these strategies are analyzed in terms of profit and consumer well-being. Using model market scenarios in Python and game theory strategies presented by each competitor, one can simulate the quality of data service received by each consumer and reach a best response for each company regarding profit and consumer well-being. The Bertrand Competition model allows one to predict the equilibrium price reached by two independent companies seeking their own self-interest, accounting for the decrease in demand due to congestion, the overcrowding of users. Using such a model created through python code, we investigated the changes in equilibrium price reached by both companies with changes in the parameters of the demand curve, effects of congestion, and the customer’s valuation of price over congestion.