The waterproofing industry is also in the "Prisoner's Dilemma"

The 'Prisoner's Dilemma' is the most representative example of a non-zero-sum game of game theory. It reflects the fact that personal best choice is not the best choice for the group and shows why it is difficult to maintain cooperation when cooperation is beneficial to both parties. According to Adam Smith's classical economic theory, everyone is a rational economic person. While individuals pursue the maximization of their own interests, society can also achieve maximum development. The prisoner’s theory proves that rational individuals often choose It is the betrayal of the alliance to achieve its own optimal, rather than cooperation to achieve the overall optimum.

Like most industries in China, the waterproof industry is also in the prisoner's dilemma. Low-price competition, low-quality products flood the market, and industry profit levels are extremely low.

In the waterproof industry, companies are pursuing profit maximization and rationally making corresponding market behaviors. When making market decisions, they are faced with three strategic choices. One is to provide qualified products to the market and guarantee their reasonable profits at a relatively high price. The second strategy is to reduce production and service costs and provide inferior products to the market. It also guarantees its own reasonable profit at a relatively low price. The third is to provide qualified products to the market, adopt low-price strategies, expand sales volume, and occupy the market share of competitors so as to ensure that they can obtain reasonable profits.

The first strategy is undoubtedly the best choice for the industry and the enterprise. It can achieve overall optimization. However, if only a few companies choose this strategy and other companies do not choose, companies that choose this strategy may gradually lose market share. , was eliminated by the market. Therefore, rational enterprises often do not choose this strategy without knowing which strategy choices other companies make.

The second strategy is absolutely catastrophic for the entire industry. Like the Chinese dairy products industry, we all know that melamine is harmful to the human body. However, in order to reduce costs and increase price competitiveness, we are adding more. It ultimately led to the collapse of the entire dairy industry, lost almost all market confidence, the high-end market is monopolized by foreign capital, and domestic dairy products companies stand aloof. At present, many companies in the waterproofing industry have chosen this strategy to cater to the low-price preferences of some customers. They have not standardized their operations and provided non-standard and inferior products to the market. Although they can meet the company's profit demand for a short while, they hurt the entire industry and are the most individual. Excellent, the overall best choice.

The third strategy guarantees standardized operations, but the price war also hurts the overall development of the industry. Just like the home appliance industry, the brutal price war has left many companies at a loss or low profit, but if they do not conduct price wars, they may face The danger of being kicked out. The price war in the waterproofing industry is also very fierce. In each individual project bid, the low-pricers often win, so when the game is played, companies also choose to win the bid in the form of low prices. The low-price competition keeps the waterproofing industry in a relatively low position. Low profit level.

Doing business is not a single transaction. The waterproofing industry is faced with a prisoner's dilemma that is repeated for many times. It is still a booming industry with rapid development and there is still a long-term development. In the repeated Prisoner's Dilemma, the game is repeated, the market and each participant have the opportunity to punish betrayers in the last game, just as the market punished the dairy industry. Enterprises that are fake and shoddy, shoddy and inferior to the market price are the betrayers of the waterproof industry. They are also punished by the market and their counterparts. The industry will be guided to develop in a normal and healthy direction, that is, eventually achieving the 'Nash equilibrium tends to Pareto optimal' in the waterproof industry. Although it is a long way, the trend is irreversible.

Release Date: 2014/10/20 17:02:35

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