For the operating systems game, let us now assume the intrinsic superiorityof Mac is not as great and that network effects are stronger for Windows.These modifications are reflected in different payoffs. Now, the payoff fromadopting Windows is 50 X w and from adopting Mac is 15 + 5 X m;n consumers are simultaneously deciding between Windows and Mac.a. Find all Nash equilibria.b. With these new payoffs, let us now suppose that a third option exists,which is to not buy either operating system; it has a payoff of 1,000.Consumers simultaneously decide among Windows, Mac, and nooperating system. Find all Nash equilibria.
For the operating systems game, let us now assume the intrinsic superiorityof Mac is not as great and that network effects are stronger for Windows.These modifications are reflected in different payoffs. Now, the payoff fromadopting Windows is 50 X w and from adopting Mac is 15 + 5 X m;n consumers are simultaneously deciding between Windows and Mac.a. Find all Nash equilibria.b. With these new payoffs, let us now suppose that a third option exists,which is to not buy either operating system; it has a payoff of 1,000.Consumers simultaneously decide among Windows, Mac, and nooperating system. Find all Nash equilibria.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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For the operating systems game, let us now assume the intrinsic superiority
of Mac is not as great and that network effects are stronger for Windows.
These modifications are reflected in different payoffs. Now, the payoff from
adopting Windows is 50 X w and from adopting Mac is 15 + 5 X m;
n consumers are simultaneously deciding between Windows and Mac.
a. Find all Nash equilibria.
b. With these new payoffs, let us now suppose that a third option exists,
which is to not buy either operating system; it has a payoff of 1,000.
Consumers simultaneously decide among Windows, Mac, and no
operating system. Find all Nash equilibria.
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