Hi Everyone,

The Spectrum Economics Challenge Series draw to an end with the results of the 6th challenge. I hope everyone who has participated in some form or other enjoyed the challenges and hopefully managed to learn something along the way. I have enjoyed putting these challenges together. It has helped me recollect my thoughts around many different areas, which helps keep my mind fresh.

Special Thanks

Before I jump into the results of this final challenge, I would like to give a special thank you to Hive account@sweetsssj. I want to thank her for both her upvotes throughout the series as well as inspiring me to start a challenge series in the first place.

I spoke to Hive account@sweetsssj a few months ago and she suggested that I started an economics challenge series. I thought that sounded like a great idea. I could not start anything for a little while as I had several obligations I needed to complete. Once I had freedom up some time, I went to work developing the six week challenges (I hoped for seven weeks initially but time did not permit). Hive account@sweetsssj has also helped fund the prize money with her upvotes. Without her upvotes, this challenge series would have lost me quite a bit of money. As it turns out, it looks like I have actually made a small profit.

I also want to thank all those that have participated over the 6 to 7 weeks of the series. These challenges would not work without your efforts. Hopefully, sometime towards the end of the year I will be able to run another similar series. I will let you know.

Quick recap of the challenge

Before I jump into announcing the winners, I would like to provide a quick recap of the final challenge. Participants were given the challenge of deciding if cooperation, competition, or some combination of the two are best approaches to a scenario set out in the question. The question presented 4 bakeries. One large bakery, two small bakeries, and one medium new entrant bakery. The nature of the businesses were explained in the post. The participants were required to view the world from the perspectives of the owners of each bakery. For example, should the large bakery cooperate with one of the smaller bakeries to take on the new bakery? Should the new bakery absorb loses to compete with the existing large bakery?

The participants were encouraged to be as creative as possible with their responses. The participants were also asked to provide their opinions on whether the arrival of the new entrant was a good, bad, or good for some and bad for other existing bakeries. Good knowledge of game theory would certainly help the participants devise more informed answers.

The link to the original challenge post can be accessed using the link below.

Participants for the final challenge

We had a nice turnout of 8 participants for Challenge 6, good stuff guys.

Here are the participants for the final challenge and the links to their entry.

Hive account@luisveco88

Hive account@toyinbaruba

Hive account@paomrp

Hive account@ojmg

Hive account@patymm

Hive account@lavanyalakshman

Hive account@luiyanii

Hive account@anaaliendres

I would like to thank all of you for the effort you have put into this challenge. You have given me a difficult time selecting a winner.

Quick recap of the prizes

For this challenge I will be giving away three prizes. These prizes are as follows:

First placed post based on the logic used to support strategies presented in the post wins 12 SBD.
Second placed post based on the logic used to support strategies presented in the post wins 8 SBD.
Third placed post based on the logic used to support strategies presented in the post wins 5 SBD.

Winners

Now it is time to announce the winners for Challenge 6 (the final challenge).

Third Place

I have decided to award third place to Hive account@luiyanii. Hive account@luiyanii describes the importance of a win-win scenario to facilitate cooperation. Hive account@luiyanii identified the strength of the two smaller bakeries and the medium bakery cooperating to gain an advantage over the larger bakery. Looks like you have applied the logic behind my ‘triple threat’ hypothesis to support your argument. Hive account@luiyanii also acknowledged that complete cooperation between the four bakeries is not possible. It was also interesting that Hive account@luiyanii briefly introduced Nash equilibrium into the analysis. It would have been even better if that had been elaborated or explained for the benefit of our non-economist readers. Congratulations you have won 5 SBD.

Second Place

I have decided to award second place to Hive account@patymm. Hive account@patymm begins with a nice concise definition of game theory. Hive account@patymm makes a case for 'Best Buy' to go all out and compete with the other bakeries based on owning modern equipment that the other bakeries do not have. Hive account@patymm made a good argument for the remaining bakeries to cooperate to compete against 'Best Buy'. The cooperation would be based on maximising of strengths while limiting the weaknesses of these three bakeries. Hive account@patymm also foresees that cooperation between the three bakeries will results in higher profits. This will make it possible to acquire the modern machinery and give the three cooperating bakeries a strong advantage over 'Best Buy'. Hive account@patymm makes a strong case for the use of cooperation to obtain an improved outcome. Congratulations you have won 8 SBD.

First Place

I have decided to award first place and winning entry for Challenge 6 to Hive account@ojmg. Hive account@ojmg put together a very strong analytical response to the challenge. I liked how Hive account@ojmg analysed the strengths and weaknesses of all four bakeries before proposing any course of action. It is always good to recognise your own strengths and weaknesses as well as the strengths and weaknesses of those that you are competing against or possibly working with.

Hive account@ojmg looks at a wide variety of strategies to compete and cooperate from the perspectives of each bakery. Hive account@ojmg proposes a potential dominant strategy where 'Thompsons' cooperates with the smaller bakeries and acquires technology to compete against 'Best Buy'. Hive account@ojmg also made a logical argument that the arrival of 'Best Buy' is good for the small firms because of the potential to cooperate with 'Thompsons'. Whereas, the arrival of 'Best Buy' is bad for 'Thompsons' as 'Thompsons' is required to invest further to maintain their dominance. Congratulations you have won 12 SBD.

Note: 'Thompsons' is the large bakery and 'Best Buy' is the medium sized new entrant bakery.

Going away

I am going on holiday for a few weeks to a location with minimal internet access. Therefore, this will be my last post for a little while. When I get back, I will be back writing economic posts again. I also hope to start another meme contest and also begin my new trading game challenge as well. Lots of good stuff to come. Below is a link to a post that will provide a little insight into what is to come when I return.