In a competitive situation involving the adoption of a common standard by all firms in the industry:
A)each player should always adopt his own preferred standard to maximize profit.
B)each player will adopt the strategy that maximizes collective profits.
C)a dominant strategy equilibrium will result.
D)there will be multiple equilibria with different strategies adopted by each player.
E)coordination will reduce the payoffs to each player.

Question

Quizplus · Accepted Answer

In such situations, multiple equilibria can occur because firms may have different preferences for standards, leading to different strategies being adopted. Coordination is necessary to reach a common standard, but it doesn't inherently reduce payoffs.

In a Competitive Situation Involving the Adoption of a Common