Consider four wireless operators A, S, T, and V in a major metropolitan area. Suppose each of them offers incentives for consumers to sign annual contracts for their service. The probability of a consumer with company A staying with them after the contract expires is 60%, and switching to the other companies S, T, and V are 10%, 10%, and 20%, respectively. These probabilities for company S, T, and V are 20%, 50%, 10%, and 20% (i.e. 50% to stay with the same, 20%, 10%, and 20% probabilities switching to A, T, and V respectively); 20%, 15%, 50%, and 15%; and 15%, 10%, 15%, and 60%.    Write a 4X4 stochastic matrix A for the problem scenario above. Suppose customer J signs a contract with company T in a given year. Write a vector corresponding to this customer J What is the probability that this customer stays with company T for a second year? The probability that customer J switches to company V?

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Markov Chains:  Project Problem

 

Consider four wireless operators A, S, T, and V in a major metropolitan area. Suppose each of them offers incentives for consumers to sign annual contracts for their service. The probability of a consumer with company A staying with them after the contract expires is 60%, and switching to the other companies S, T, and V are 10%, 10%, and 20%, respectively. These probabilities for company S, T, and V are 20%, 50%, 10%, and 20% (i.e. 50% to stay with the same, 20%, 10%, and 20% probabilities switching to A, T, and V respectively); 20%, 15%, 50%, and 15%; and 15%, 10%, 15%, and 60%. 

 

  1. Write a 4X4 stochastic matrix A for the problem scenario above.
  2. Suppose customer J signs a contract with company T in a given year. Write a vector corresponding to this customer J
  3. What is the probability that this customer stays with company T for a second year? The probability that customer J switches to company V?
  4. After five years, what are the probabilities that you will find customer J with each of these companies A, S, T, and V
  5. After 20 years, what are the probabilities that you will find customer J with each of these companies A, S, T, and V
  6. Are the probabilities in 4 and 5 the same?
  7. If the probabilities stopped changing, when did it first happen?
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