Subject : Game Theory

Topic : Supplier Encroachment - Supplier Produces a copycat of the product and sell to the customer ?

Q-Need help to develop Profit function which can facilitate/ ?

Any input or any help to look for right material !

Entry of copycats of luxury brands/ 1 Introduction Model Mathematics In this Model we describe the sequence of events before we fomulate the market and consumer characteristics. 3 Sequence of Events We consider a two-period game with observable actions between the incumbent I and the copycat firm C. At the beginning of Period 1. I launches a new product of intrinsic quality al (normalized to 1) and determines its selling price pl. Upon observing I's product price pl. Cfirst decide whether to enter or to stay out of the market at the beginning of Period 2. If Centers, it enters with a copycat product and sets it selling price RC 6 The unit production cost for I is kwhere hI E (0, 1). We assume that the copycat's unit production cost C