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Now Amazon has decided to enter the streaming services market with Amazon Video, which also has a marginal cost of 0. Amazon also has a
Now Amazon has decided to enter the streaming services market with Amazon Video, which also has a marginal cost of 0. Amazon also has a choice of setting a price of $9 or $12, and would also have 1 million loyal customers for their video services. Therefore, if all three firms set the same price, they will split the entire market. Question: Again treating this as a repeated interaction (but now between Hulu, Netflix, and Amazon, under what conditions on "r" would all firms pricing at $12 be sustainable?
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