values, 1/2 and 1: Pr(0-1)= a and Pr(0= qual to s. Suppose that the search engine induces expected relevance 0. Show th is v² = 1- 28 8€ What is the price charged by a firm of quality and its profit? Express search engine's fee and profit in terms of 0*, 0 and s. Suppose that a = 1/8. What is search engine's profit if it induces high if its profit when it induces distorts search, i.e. 0 = 1/2? Which fee sh
values, 1/2 and 1: Pr(0-1)= a and Pr(0= qual to s. Suppose that the search engine induces expected relevance 0. Show th is v² = 1- 28 8€ What is the price charged by a firm of quality and its profit? Express search engine's fee and profit in terms of 0*, 0 and s. Suppose that a = 1/8. What is search engine's profit if it induces high if its profit when it induces distorts search, i.e. 0 = 1/2? Which fee sh
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
Related questions
Question
![Consider a version of Eliaz and Spiegler model. Suppose that v is distributed uniformly on (0, 1], and
relevance parameter takes two values, 1/2 and 1: Pr(0-1)= a and Pr(0=1/2) = 1-a. Let search cost
be equal to s.
1. Suppose that the search engine induces expected relevance 0. Show that consumer reservation values
is
v² = 1-
28
0e
2. What is the price charged by a firm of quality and its profit?
3. Express search engine's fee and profit in terms of 0, 0 and s.
4. Suppose that a = 1/8. What is search engine's profit if it induces high relevance, i.e. * = 1? What
if its profit when it induces distorts search, i.e. 0 = 1/2? Which fee should search engine choose?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F45990b67-f553-4587-89d0-a7683b91a1e9%2F22249efc-6cce-4996-ba29-bce3b668955b%2Fsilv58q_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider a version of Eliaz and Spiegler model. Suppose that v is distributed uniformly on (0, 1], and
relevance parameter takes two values, 1/2 and 1: Pr(0-1)= a and Pr(0=1/2) = 1-a. Let search cost
be equal to s.
1. Suppose that the search engine induces expected relevance 0. Show that consumer reservation values
is
v² = 1-
28
0e
2. What is the price charged by a firm of quality and its profit?
3. Express search engine's fee and profit in terms of 0, 0 and s.
4. Suppose that a = 1/8. What is search engine's profit if it induces high relevance, i.e. * = 1? What
if its profit when it induces distorts search, i.e. 0 = 1/2? Which fee should search engine choose?
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