Consider the Network Experiment card game you played in class. Recall that we assumed: There are 10 customers - Customer initially has a value of -12...) . If customer already adopted (excluding customer). then customer's value will be updated to **.eg, if Customer 1 and Customer 2 already adopted then Customer 10's value will be updated from the initial value of 10 to the new value of 2*10 - 20. (This assumption formalizes mathematically that customer willingness-to-pay follows Metcalfe's law). Customer adopts if the updated value if greater or equal to the price: Each customer buys no more than one product . Unless otherwise specified (as in III and IV), paying customers all pay the same price (as in I and II). Fill the blanks or answer the questions. (Seeding three customers with one optimal price point) Consider give away three products. The optimal strategy is to Give away to Consumer (name three customers who don pay) . Charges to all others . Who will buy? (name customers who pay) Total revenue is: Freemium rate (ratio of free/pay customers) is 4 Optimal seeding with one optimal price point) How many products should the firm give away in order to make the maximum possible profil? Give for free how many customers you want to give your products away) Charges to all others Who will buy now? X name customers who pay) Total revenue is: . Freemium rate is m (Optimal seeding with two optimal price points) Assume now you can segment the market by charging two different positive prices. How many customers should the firm seed (give away products for free) and how much should you charge each segment in order to make the maximum possible revenue. . Give for free how many customers you want to give your products away) Charge pl - to .Charge another price p2 =15 to Total revenue is: Freemium is: (Penetration pricing) Assume you can do personalized pricing by charging each customer an individual price, i.e.. you can do perfect price discrimination using a perfect penetration pricing strategy. IV. (Penetration pricing) Assume you can do personalized pricing by charging each customer an individual price, i.e., you can do perfect price discrimination using a perfect penetration pricing strategy. What is the optimal price you should charge to each customer? Customer 2131415161718/9/101 Total revenue is: Freemium rate is: Brief discuss pros and cons of strategy IV (perfect penetration pricing) vs. strategy II. Pros: Cons: v. In the presence of network effects, simple economic intuition might be misleading. . (Hint: Fill the missing words. One word per bracket.) Managers have to also factor in any bandwagon effects that ) adopters of the technology create for (I) adopters. In a nutshell, the nature of giving it away is trying to change the _) curve