Exercise | June 2012 (Revised July 2013)

Competition Simulator Exercise: Instructions

by Eric Van den Steen

Abstract

In the Competition Simulator Exercise, students explore through trial and error some important economic concepts for competitive strategy and managerial economics. Topics that are explored include differentiation with and without pricing, price competition (strategic complements), capacity competition (strategic substitutes), effect of number of competitors in a market, natural monopoly, judo economics, endogenous economies of scale, technology choice as entry deterrence, and capacity limitation in commodity markets. It can be used to introduce these concepts without necessarily relying on a lot of math or as an intuitive complement to a more mathematical exposition.

Keywords: Competitive Strategy; Economics;

Citation:

Van den Steen, Eric. "Competition Simulator Exercise: Instructions." Harvard Business School Exercise 712-498, June 2012. (Revised July 2013.)