Suppose that a two-way network initially involves two groups of users (A and B) and a single
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Suppose that a two-way network initially involves two groups of users
(A and B) and a single provider (H1). Suppose that H2 and H3 enter the market with superior network technologies. This one-time, static game is depicted in the following figure.
a. What is the Nash equilibrium in this one-time game?
b. If this game is infinitely repeated, is there any interest rate for which existing users will defect to a superior technology?
c. If this game is infinitely repeated, is there any amount that H2 and H3 can pay users of H1 to switch technologies?
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Related Book For
Managerial Economics: Tools For Analyzing Business Strategy
ISBN: 307174
1st Edition
Authors: Thomas J Webster
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