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Game Theory and Strategy · End Term · 22 Dec 2024 · September 2024 term · Set QDB1

Question 1: Consider the market for a single network good as discusse…

Question 1

+2 marksOne correct option

Consider the market for a single network good as discussed in the lecture and write a different consumer's utility function for joining the network as U(θ)=θ(a+vne)U(\theta) = \theta(a + vn^e) capturing the idea that it may be more plausible that a user who has a higher value for the standalone component of a technology also assigns more importance to the size of its network (i.e. consumers differ in their valuation of both the standalone and the network benefits). Here, aa is the standalone benefit, v>0v > 0 measures the network effect, nen^e is the expected number of users joining the network and θ\theta is uniformly distributed on the unit interval.

Based on the above data, answer the given subquestions

  1. A
  2. B
  3. C
  4. D
Show answer

Correct answer

  • B

Question 1 of 38 in the IIT Madras BS Game Theory and Strategy (Game Theory) End Term paper sat on 22 Dec 2024, in the September 2024 term (IIT M DEGREE AN EXAM QDB3 22 Dec 2024). It carries 2 marks.

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