Most major electric car manufacturers belong to two rival camps. Each group uses one of two incompatible

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Most major electric car manufacturers belong to two rival camps. Each group uses one of two incompatible technologies to charge their cars at recharging stations (similar to gas stations). Both technologies use direct current to charge car batteries to 80% of capacity in less than 20 minutes. The Japanese auto manufacturers (Honda, Mazda, Mitsubishi, Nissan, Subaru, and Toyota) and PSA Peugeot Citroen back the CHAdeMO technology. Most German and U.S. automakers (Audi, BMW, Chrysler, Daimler, Ford, General Motors, Porsche, and Volkswagen) back the Combo technology. The CHAdeMO technology was introduced first and is in much wider use (Julia Pyper, “Charger Standards Fight Confuses Electric Vehicle Buyers, Puts Car Company Investments at Risk,” www.eenews. net, July 24, 2013). Relabel the extensive-form diagram in the Challenge Solution (keeping the current payoffs) to illustrate the decision making of these firms. Now, change your analysis. Some industry analysts believed that these firms introduced the Combo standard to slow sales of the Nissan Leaf so that rival manufacturers could catch up. Change the payoffs to illustrate why the German-American group might choose that standard even though the Japanese-Peugeot group acted first.

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Microeconomics

ISBN: 978-0134519531

8th edition

Authors: Jeffrey M. Perloff

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