The highest quality seller is completely unaffected by the prices charged by its competitors. It can act as though it is the only seller in the market, compute its optimal price, and ignore the rest of the sellers because none can compete on quality. Now suppose that the sellers use the myoptimal strategy. In other words, when it is a seller's turn to reevaluate its price, it does an exhaustive search over all possible candidate prices as follows. For each candidate price, it uses its knowledge of its competitors prices and qualities and its knowledge of the individual parameters of each of the buyers to compute the expected profit for that candidate price.
All buyers are quality-sensitive.
Figure 2 illustrates a typical simulation run for a population of 5 myoptimal sellers and 1000 buyers. The small discrepancies can be attributed to the fact that the number of buyers in the simulated system is finite rather than infinite. Computationally-limited myoptimal sellers have access to the same unlimited information that myoptimals do, but are more limited in computational capability. They differ from myoptimals only in that they do not perform an exhaustive search over all possible prices. In our implementation, computationally-limited myoptimals consider the current price and 10 other randomly generated candidate prices.