Airline Mogul Forum
Airline Mogul => General Chat => Topic started by: Pacific on January 13, 2008, 01:20:23 pm
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For casual players:
When faced with €1 undercut "bug" scenario, undercut in increments of €20 or over instead of €1.
For hardcore players:
Recently, I tinkered around with €1 fares because I was bored - but I learnt something significant from it. The base demand for passengers between 2 airports actually increases the lower the prices go. So despite the €1 undercutting, an equilibrium will eventually be reached. So to reduce the effort resetting the same routes over and over again, start undercutting by €20 or more so that the equilibrium is reached quickly, instead of painfully €1 by €1.
Since an equilibrium price exists where everyone can have 100% LF, I consider the €1 price elasticity "bug" to actually not exist.
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Yeah so there may be an equilibrium where everyone has a 100% LF, but would everyone still be able to make €50,000 odd on that route?
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Yeah so there may be an equilibrium where everyone has a 100% LF, but would everyone still be able to make €50,000 odd on that route?
Welcome to a competitive game. 8)
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"Recently, I tinkered around with €1 fares because I was bored - but I learnt something significant from it. The base demand for passengers between 2 airports actually increases the lower the prices go. So despite the €1 undercutting, an equilibrium will eventually be reached. So to reduce the effort resetting the same routes over and over again, start undercutting by €20 or more so that the equilibrium is reached quickly, instead of painfully €1 by €1. "
Yes, that is the basic law of demand. In reality, airline routes will, in the long term, adjust to the highest price that airlines can get based on demand, their capacity and the market capacity. Dropping prices by $1 is silly. The good players match the prices to the lowered value of their competitors when they bring in larger aircraft or drop it to a price where the market will roughly sustain the demand. Nice you're seeing this. It's fun messing with the less intelligent players who don't get this. I have one guy who'll put an argosy commuter on one of my routes with 3 routes per day. I take my single drop cheap as hell aircraft and quickly drive the market price to nothing. He's too foolish to listen to my advice, so I'll let him enjoy the <$100 DOP he'll get from that plane.
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That's why I usually decrease in increments of $10 - it gets to the equilibrium quicker, meaning I don't have to spend so much time editing routes.
The fly in the ointment is frequencies - if you get near an equilibrium and one airline adds another frequency you start the whole thing over again.
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I don't know what this bug is I have read about. The same thing was true last round. If you set your price one euro lower you got 100% lf.
I generally try to lower my price just below the highest offered and usually can get 90-100 %
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I don't know what this bug is I have read about. The same thing was true last round. If you set your price one euro lower you got 100% lf.
I generally try to lower my price just below the highest offered and usually can get 90-100 %
me too. if the lowest fare on a route is, say, $500, i always do $499 fare. :twisted:
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"me too. if the lowest fare on a route is, say, $500, i always do $499 fare. Twisted Evil"
Which is stupid, btw. Your competitors just reduce it to 498 and then another goes to 497, etc. Reducing it to a point where the market can handle the number of planes is the only way to go. Otherwise, you're just playing poorly.
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"me too. if the lowest fare on a route is, say, $500, i always do $499 fare. Twisted Evil"
Which is stupid, btw. Your competitors just reduce it to 498 and then another goes to 497, etc. Reducing it to a point where the market can handle the number of planes is the only way to go. Otherwise, you're just playing poorly.
stop being so negative to nwaboy. Hes free to do what he wants.
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"me too. if the lowest fare on a route is, say, $500, i always do $499 fare. Twisted Evil"
Which is stupid, btw. Your competitors just reduce it to 498 and then another goes to 497, etc. Reducing it to a point where the market can handle the number of planes is the only way to go. Otherwise, you're just playing poorly.
who cares, its a quick and lazy way for me to basically mooch on my opponents' research money and get 100% loadfactor right away :twisted:
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Well, my strategy is for those who's too lazy to reset the same routes over and over again.
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Yeah, and then you end up getting nothing from the route because your competitors drop the price after you do. Do what you want, but again, there's a reason why some of us have a ton of money and GOP and others have little.
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What I do when I enter another route:
0 competition:
Highest price with 100 LF (duh!)
1-2 competitors:
Since plane choice can affect your price, I try a certain range above the competition. Sometimes it works, sometimes it dosn't.
>2 competitiors:
I first try something in the middle, ironically enough, it does tend to work (like in the above situation), but just like in that above situation, some undercutting might be needed.
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Yeah, and then you end up getting nothing from the route because your competitors drop the price after you do. Do what you want, but again, there's a reason why some of us have a ton of money and GOP and others have little.
duh, which is exactly what is what people might want to achieve!
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Yeah, and then you end up getting nothing from the route because your competitors drop the price after you do. Do what you want, but again, there's a reason why some of us have a ton of money and GOP and others have little.
i dont care, like i said it takes no effort to do it again.
btw...GOP? Republicans? :? :P
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the fact is that there is an equilibrium when there are not too many planes on the same route. if there are, the equilibrium price will be 1 euro anyhow
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DOP. Sorry, been watching the presidential race too much.