Suppose the cost of technology adoption per user

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Suppose the value of technology adoption to a given user is log(n) where n is the total number of users who have already adopted the technology.

Suppose the cost of technology adoption per user is c. Assume there are N users in the market. Assume c > 0.

What will happen if the market is left on its own? How many users will adopt? Explain the answer using the model as described above. [2]

What is socially optimal level of adoption? What would be social value at that level? [2]

Explain two mechanisms (clearly and using the data) that will lead to socially optimal level of adoption. [3]

Reference no: EM13771667

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