Network Economics Simulation Consider your network economics model from Exercise 1.5. There are two major sources of uncertainty that should be accounted for.

For a new communications technology, the costs will initially not be known with certainty. Assume that the costs may range between $3 and $8 (with a most likely value of $5, following a PERT distribution).

Also, the intrinsic valuations can only be estimated from market research. Assume that the intrinsic valuation function (100(1 – F))

provides an expected estimate, but that the real valuations must be multiplied by an uncertainty factor. This factor will follow a normal distribution with a mean of 1 and a standard deviation of 0.2.

Determine 90% confidence intervals for the critical mass and saturation levels.