Now we are at end of round 2.
As to my surprise, our team did perform much better than I previously anticipated, which provided me both shock and surprise, Frankly, I am pleased that my predictions were off-mark in this instance, as our team to perform better than previously anticipated. The actual sales figures were markedly higher than those projected by my production model. By extracting and analyzing various data points from the report, I try to identify the specific factors contributing to this discrepancy.
Because this week is my exam week and there are many mid-term exams that I need to pay attention to, so I didn’t put too much energy into Capsim. However, my teammates’ discussion in class reminded me of something I had forgotten for a long time. The question is, is marketing a science or an art?
For market prediction, I do have some thoughts, reflecting from the round one, and round two.
In each reporting cycle, I work to comprehend and elucidate the strategies employed by competing teams. However, the varied levels of understanding regarding game mechanics and the depth of business knowledge across teams render their actions less predictable. Consequently, such analyses might be prone to over-interpretation, especially within the context of an undergraduate course.
As we embark on a new round, particularly during the output calculation phase, it is imperative to perceive it as an entirely distinct game. The outcomes of the preceding round merely offer varied starting positions for the teams and do not necessarily dictate the continuation of previously employed strategies. Decision-making in each round should be anchored in the prevailing market conditions, the strategies of adversaries, and one’s own resources and capabilities. An excessive emphasis on past results can engender strategic myopia and erroneous judgments.
Within this circumscribed setting, characterized by a known market and a fixed set of competitors, output predictions are predominantly contingent upon the reactions of opponents. Drawing from my academic and professional experiences, I have observed a propensity among many to employ linear thinking. This involves forecasting the current round’s production plan based on the outcomes of the preceding round, a mindset often associated with engineers or accountants. However, I find this approach limiting. Capsim epitomizes an oligopolistic market, replete with numerous Nash equilibrium scenarios. As such, the integration of game theory and a profound grasp of game mechanics is of paramount importance. Game theory furnishes us with a theoretical scaffold, facilitating a more nuanced understanding of market competition and strategic decision-making.