Why the Pricing Algorithm Has Two Completely Different Strategies for Rank 1

The first version of the optimizer did one thing: undercut the cheapest competitor by 5%. It worked for products where the seller wasn't competitive. But for products where the seller was already ranked first, the algorithm dropped the price by 5% below itself. Every run made the product cheaper. Left unattended for a week, a €450 inverter would have been listed at €320. The algorithm was solving for a rank it had already won. The fix was to split the price optimizer into two branches: one for when you're losing, one for when you're winning. The winning branch does the opposite of undercutting. It tries to raise the price. The Rank 1 Problem On Idealo, the cheapest offer gets the default "Buy" button. Every other seller gets a smaller listing below it. The difference between rank 1 and rank 2 is not 10% fewer clicks. It's closer to 70% fewer clicks, because most comparison shoppers click the first price they see and move on. So rank 1 is worth defending. But most pricing algorithms tre