Econ 483_Lecture 15_Indirect networks

E indirect networks open standards cases high tech

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Unformatted text preview: Indirect networks Open standards Cases High-tech industry Silicon Valley jobs: a recurring cycle of boom & bust Lecture 15: Indirect networks, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. E Indirect networks Lecture 15: Indirect networks, Open standards Cases Econ483: Econ of Innovation & Technology, High-tech industry Evangelia Chalioti c A ll rights reserved. E Indirect networks Open standards Cases High-tech industry Exercise Lecture 15: Indirect networks, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. E Indirect networks Open standards Cases High-tech industry Exercise: networks (this slide: recommended; not required) Model: c : the marginal cost of serving each consumer n: the number of consumers in the network Suppose (willingness-to-pay): w (n, n ) = 1 n 1 2n 2 +1 Monopolist: The monopolist has direct control over the size of the network & can sustain a 1 network of size n by charging a price p (n ) = w (n, n ) = n + 1 21 2 n The monopoly pro…ts are Π (n ) = n [p (n ) c] At the optimum (by FOC): 1+ Lecture 15: Indirect networks, 1 2 2nm c=0 Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. E Indirect networks O...
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This note was uploaded on 03/16/2014 for the course ECON 483 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

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