AI too price competitive with prices?

[City Builder]

Hey,

So, I've built a bed factory and am producing beds (obviously) and I have one competitor in town (the AI obviously).

So, I see that his prices are slightly below mine, so I lower my retail bed prices, and watch and the AI lowers his bed prices, then I lower mine, and he lowers his, on and on we go, each of us lowering our prices in turn.

The thing is that my prices are still quite higher than what it costs me to produce the bed where as the AI's prices are now selling the beds at a loss.

It seems to me that the AI is either too price competitive or it's just plain stupid and can't see that it's selling it's beds at a loss now.

CapMain 2012-10-22 23-38-27-45.jpg (534.75 KiB) Viewed 507 times

Perhaps there is just something that I'm not figuring into the equation here? Could there be some other reason that he's being so price competitive with me that he would sell the beds at a loss?

I'm going to go back and see just how much he's willing to sell the beds at a loss for, would be interesting to knock him way the hell down in price, but if it were me, I would simply get out of the bed market if I can't compete with the other players prices rather than sell beds at a loss.

[mwyeoh]

Yeah, the AI simply wants to have the highest overall rating.
And the quickest way to do this is lowering prices.

Ive been able to force an AI to sell at less than half the cost price before (I had a huge tech lead so was still making money)

[tingchung]

rise your tech ( go r&d or use better raw material )

rise your brand name ( use 2 or 3 media to advertise)