Question

why have oligopoly tech firms ( microsoft, apple) with near monopolies in their own sectors sought to compete with tech firms that have extremely strong, near monopoly positions in other sectors. Does this defy game theory or support it? Explain

Answer 1

Soln. This is true that tech firms like Microsoft, Apple, with nearly monopolies in their own sectors, sought to compete with tech firms, from other sectors. There are reasons behind it.

• Although, on the product as a whole, Apple and Microsoft have almost monopoly in market share but there are features, that their products are using, is being developed and innovated by technical firms from other sectors.To make customer, feel best experience for those particular features, they need to compete with technical firms, those have niche capabilities to develop. If those features, are well provided by technical firms from other sectors, then customers having priorities for those features, will buy product from niche technical firms.
• There are technical firms from other sectors, that are trying to build and acquire products from sectors similar to Microsoft and Apple, and hence they need to be careful and competitive with these tech firms.

Since, here loss for one is win for other, which supports game theory.