Question: Aber and Byft are two competing mobile ride-sharing companies serving one million customers jointly. Suppose that each customer chooses from Aber and Byft according to

Aber and Byft are two competing mobile ride-sharing companies serving one million customers jointly.

Suppose that each customer chooses from Aber and Byft according to the following rules:

  • Each customer can only choose one of the two companies in each month, and must stay with that company for the entire month, before considering switching the next month.
  • A new customer of Aber is someone who was not using Aber in the prior month. Such customer is equally likely to stay with Aber (a loyal customer), or to switch (becomes a new customer to Byft) next month. The same holds true for new customer of Byft.
  • A loyal customer is someone who used the same compnay in the prior month. SUch customer has3/4probability to stay loyal, and a1/4probability to switch to the competitor.
  • As shown in the following figure, a Markov chain can be used to model the usage behavior of customers in above setting. Here, AL stands for loyal customers of Aber, AN stands for new customers to Aber, BL stands for loyal customers of Byft, BN stands for new customers to Byft.

Aber and Byft are two competing mobile ride-sharing companies serving one million

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