The CEO Game

Inorder to succeed in the CEO Game you need to apply real life strategies.

For instance, in the real business world, in order to earn more than normal profit (which is zero) you need to do something better than the other competitors. Otherwise, you’ll simply maintain your position, instead of earning a real profit.

Price Wars- Who Will Win?

It is easy to describe this problem in a simplified economy. There are two stores selling the same products in the same place to the same customers, who have complete information on the store prices and there is no additional cost to produce aside the cost of the product itself. So people will go from one store to the other to bargain until they get the minimum price of one store. If the product has the same manufacturing cost to both stores, the stores will end up selling their products in the same price. Their profit will be normal profit rate, a little higher than the interest rate.

How do you get to a normal profit rate?

Well, if you don’t have anything unusual like a unique product or services, trademark, patent or even knowledge that you’re other competitors don’t have, eventually you’ll get to normal profit rate. Because if you are selling a commodity and if your store is in a certain region that makes lots of money by selling a product that every one of your competitors can sell at the same price, they will. So they will start to sell the same commodity in the same profitable region and slowly decrease your profit rate. Eventually, one store will start to lower its prices in order to be more attractive to the customers and that will lower your profit rate of both stores even further. Then you will lower your price and so on and so forth–this is called a “Price war“. The only ones winning here are the customers, while you and your competitors’ loss profit until you reach the normal profit rate.

How can you avoid a normal profit rate? As mentioned before, you need something that your competitors don’t have, such as a patent on a product or trademark, which your competitors can’t use, and therefore you can charge how much you want because you are the only one that can supply the certain good. Even a source of knowledge can be a barrier to competition, but not as strong as patent or trademark. For example, if you know in what region the demand to your product is the highest you can open the store there and sell it at high prices. But after a while your competitors will find this profitable region and start selling the same product and once again you will have a price war.

This is just one of the key economic concepts you need to understand to succeed in the business world. In the CEO Game, as a realistic business simulation , these concepts are just as important. Good luck, with setting up your business tycoon!

Omri.

The CEO Game.

eRepublik is an online multi-player simulation game and a social network that was developed by eRepublik labs and was launched in October 2008. The idea behind the game was to create a virtual world, which is based on the real world, in which every participant can take part in determining his country’s future. Players, who are referred to as citizens,  can determine financial policies, affect local and national politics, create and join political parties, build their own businesses and even wage war on other countries. eRepublik uses the combination of a social networking platform and a strategy game to create a virtual realm of what might our world look like if things had gone different.

eRepublik – Managing the New World

eRepublik is built out of three main modules:

• Economic Module – eRepublik simulates a virtual economy in which every player can simulate his own business. The economy is affected by the local financial relations between the companies and by the global economy. eRepublik also allows each country to determine its local financial policies and use them to affect the global economy.
• Political Module –In eRepublik , once a certain citizen achieves the required amount of experience, the citizen can take part in his own country’s politics. Each country has its own parties, congress and president and each year eRepublik holds an election for all of those positions.
• War Module – The President of each country can decide, after the approval of his congress, to wage war over other countries. War is an important influence on the financial growth of every country.

Since its release at 2008, eRepublik has won a few awards including “The Future of Web Apps“ Award and has raised over 2.5 million Euros. In the CEO Game we use similar baselines to those used in eRepublik. We believe that integrating real-world data into a business simulation can create a simulation that is more relevant than ever and will assist in learning how the local and global financial markets work.

Ailon.

The CEO Game.