Consider a slight variation of the dynamic monopoly game analyzed. Suppose there is only one high-type customer (Hal) and only one low-type customer (Laurie).
(a) Analyze this game and explain why p2 = 200 is not optimal if Hal does not purchase a monitor in period 1. Find the optimal pricing scheme for Tony. Discuss whether Tony would gain from being able to commit to not selling monitors in period 2.
(b) Finally, analyze the game with one of each type of customer and ownership benefits given in the following figure. In this case, would Tony gain from being able to commit to not selling monitors in period 2?
