Question
Two microwave ovens,Emerson and Panasonic Regular, had been competing with each other and their market share were 57% and 43%, respectively. Emerson is 0.5 cubic
Two microwave ovens,Emerson and Panasonic Regular, had been competing with each other and their market share were 57% and 43%, respectively. Emerson is 0.5 cubic feet and priced at $110, while Panasonic Regular is 0.8 cubic feet and priced at $180. Panasonic company introduced a new microwave oven model, Panasonic Premium, which is 1.1 cubic feet and priced at $200. After introduction of Panasonic Premium, the market share of Emerson decreases by 30% whereas that of Panasonic Regular increases by 17%. Explain why this may happen, using prospect theory.
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