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1. explain briefly The O-Ring Model proposed by Michael Kremer
Step by step
Solved in 3 steps
- 3) A SIMPLE MODEL OF MOVIE-LAUNCH TIMING Consider the following model of how movie studios might think about the optimal timing of launching a movie (and thereby entering a market). Suppose there are two studios (or movies), X and Y, and there are two holiday weekends, 1 and 2. In weekend 1, there is a total of 8 movie fans, evenly divided into regular moviegoers {A,B,C,D} and occasional moviegoers {E,F,G,H}. In weekend 2, there is a total of 8 movie fans, evenly divided into the same regular moviegoers from before {A,B,C,D} and new occasional moviegoers {I,J,K,L}. All fans want to watch movies (produced at zero cost) and the price per ticket is $1. How should we envision demand? Suppose that all moviegoers will watch a movie that they have not seen before, but will never watch a movie for a second time. Also suppose that if two previously-unseen movies are available, the customers will "flip a coin" and be split evenly, with alphabetically-earlier moviegoers choosing X and others…a) Explain the Prebisch-Singer hypothesisQUESTION 6 Which one of the following statements about the modified Stackleberg model is correct? A. None of the other statements is correct. B. Entry accomodation is always more profitable than entry deterrence. C. Whether entry deterrence is more profitable than entry accomodation can depend on the size of the fixed cost. D. Entry deterrence is always more profitable than entry accomodation.