SHS Web Conf.
Volume 65, 2019The 8th International Conference on Monitoring, Modeling & Management of Emergent Economy (M3E2 2019)
|Number of page(s)||6|
|Section||Mathematical Methods, Models, Informational Systems and Technologies in Economics|
|Published online||29 May 2019|
The price competition simulation at the trading market in the presence of electronic and traditional trade
Kyiv National University of Trade and Economics, Computer Science Department, Kyiv, Ukraine
2 Kyiv National University of Trade and Economics, Journalism and Advertising Department, Kyiv, Ukraine
* Corresponding author: Pursky_O@ukr.net
In the present work, an attempt has been made to apply economic and mathematical methods for the simulation of electronic trading market operation based on price competition between e-trade companies and traditional trade enterprises. The developed price competition model based on the concept of symmetric product differentiation. The results obtained in the present investigation demonstrate that in a mixed strategy, firms sell products at different prices, depending on the price strategy or the volume release strategy. The company that sets the volume, sells more, but at a lower price than its competitor which sets prices. The influence of strategic output exceeds price influence. Thus, the company that sets prices, falls into an unfavorable situation and receives lower profits compared with its competitor with the strategy for the volume of production. The company that has decided to introduce electronic trading technology initially will bear losses.
© The Authors, published by EDP Sciences, 2019
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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