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Game Theory and Strategy · End Term · 31 Aug 2025 · May 2025 term · Set QDB3

Question 7: Consider the market for a single network good as discusse…

Question 7

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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
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Correct answer

  • B
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Question 7 of 37 in the IIT Madras BS Game Theory and Strategy (Game Theory) End Term paper sat on 31 Aug 2025, in the May 2025 term (IIT M DEGREE AN EXAM QDB3 31 Aug 2025). It carries 1 mark.

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