Research output: Scientific - peer-review › Conference contribution

**Winning in Retail Market Games : Relative Profit and Logit Demand.** / Hoogland, Jasper; De Weerdt, Mathijs M.; Poutre, Han La.

Research output: Scientific - peer-review › Conference contribution

Hoogland, J, De Weerdt, MM & Poutre, HL 2015, Winning in Retail Market Games: Relative Profit and Logit Demand. in *Proceedings - 2015 IEEE Symposium Series on Computational Intelligence, SSCI 2015.*, 7376827, IEEE, Los Alamitos, CA, pp. 1794-1800, 2015 IEEE Symposium Series on Computational Intelligence, IEEE SSCI 2015, Cape Town, South Africa, 7/12/15. DOI: 10.1109/SSCI.2015.250

Hoogland, J., De Weerdt, M. M., & Poutre, H. L. (2015). Winning in Retail Market Games: Relative Profit and Logit Demand. In *Proceedings - 2015 IEEE Symposium Series on Computational Intelligence, SSCI 2015 *(pp. 1794-1800). [7376827] Los Alamitos, CA: IEEE. DOI: 10.1109/SSCI.2015.250

Hoogland J, De Weerdt MM, Poutre HL. Winning in Retail Market Games: Relative Profit and Logit Demand. In Proceedings - 2015 IEEE Symposium Series on Computational Intelligence, SSCI 2015. Los Alamitos, CA: IEEE. 2015. p. 1794-1800. 7376827. Available from, DOI: 10.1109/SSCI.2015.250

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title = "Winning in Retail Market Games: Relative Profit and Logit Demand",

abstract = "We examine retailers that maximize their relative profit, which is the (absolute) profit relative to the average profit of the other retailers. Customer behavior is modelled by a multinomial logit (MNL) demand model. Although retailers with low retail prices attract more customers than retailers high retail prices, the retailer with the lowest retail price, according to this model, does not attract all the customers. We provide first and second order derivatives, and show that the relative profit, as a function of the own price, has a unique local maximum. Our experiments show that relative profit maximizers {"}beat{"} absolute profit maximizers, i.e. They outperform absolute profit maximizers if the goal is to make a higher profit. These results provide insight into market simulation competitions, such as the Power TAC.",

keywords = "Games, Electronic mail, Stochastic processes, Mathematical model, Analytical models, Computational intelligence, Smart grids",

author = "Jasper Hoogland and {De Weerdt}, {Mathijs M.} and Poutre, {Han La}",

year = "2015",

month = "12",

doi = "10.1109/SSCI.2015.250",

isbn = "978-1-4799-7560-0",

pages = "1794--1800",

booktitle = "Proceedings - 2015 IEEE Symposium Series on Computational Intelligence, SSCI 2015",

publisher = "IEEE",

address = "United States",

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T2 - Relative Profit and Logit Demand

AU - Hoogland,Jasper

AU - De Weerdt,Mathijs M.

AU - Poutre,Han La

PY - 2015/12

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N2 - We examine retailers that maximize their relative profit, which is the (absolute) profit relative to the average profit of the other retailers. Customer behavior is modelled by a multinomial logit (MNL) demand model. Although retailers with low retail prices attract more customers than retailers high retail prices, the retailer with the lowest retail price, according to this model, does not attract all the customers. We provide first and second order derivatives, and show that the relative profit, as a function of the own price, has a unique local maximum. Our experiments show that relative profit maximizers "beat" absolute profit maximizers, i.e. They outperform absolute profit maximizers if the goal is to make a higher profit. These results provide insight into market simulation competitions, such as the Power TAC.

AB - We examine retailers that maximize their relative profit, which is the (absolute) profit relative to the average profit of the other retailers. Customer behavior is modelled by a multinomial logit (MNL) demand model. Although retailers with low retail prices attract more customers than retailers high retail prices, the retailer with the lowest retail price, according to this model, does not attract all the customers. We provide first and second order derivatives, and show that the relative profit, as a function of the own price, has a unique local maximum. Our experiments show that relative profit maximizers "beat" absolute profit maximizers, i.e. They outperform absolute profit maximizers if the goal is to make a higher profit. These results provide insight into market simulation competitions, such as the Power TAC.

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KW - Electronic mail

KW - Stochastic processes

KW - Mathematical model

KW - Analytical models

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KW - Smart grids

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