Two firms compete by choosing a price between 0 and 1 and a message for their product. T1 firms produce an identical product, but the messages chosen by the firms influences the ability of consumers to compare the products. There are two possible messages: a and b. There is a unkown mass of consumers(i.e. the size of the market is 1). If a consumer is able to compare the two products, she chooses the cheapest one (and buys each with probability 1/2 if they have the same price). Otherwise, she buys each with probability 1/2. If at least one of the firms chooses message,all consumers can compare the products. If both firms choose message b, a fraction a= l (i.e. all consumers)are unable to compare the products Firms have constant marginal costs of c=0 and no fixed costs
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.