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Technology Stocks : Intel Corporation (INTC)
INTC 35.53-1.1%Nov 14 9:30 AM EST

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To: Lee Penick who wrote (41638)12/6/1997 1:15:00 PM
From: Rob McCauley  Read Replies (2) of 186894
 
Lee,
Intel certainly has the economies of scale and the profits to squash any competition. However AMD and Cyrix have survived all this time. My theory is that PC manufacturers use AMD as leverage to save millions of dollars by forcing Intel to keep cutting prices. If AMD ever went belly up, it would mean Intel would be free to keep prices high. I wouldn't be surprised if AMD is somehow paid to stay in the game.
I recommend the book "Co-opetition" by Brandenburger and Nalebuff which covers this and other types of game theory.

Rob McCauley
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