In industries that have increasing returns to adoption,allowing competitors to get a head start in building an installed base is a safe strategy.

Question

Quizplus · Accepted Answer

Industries with increasing returns to adoption (such as network effects) typically have high barriers to entry and require significant investment to build an installed base. Allowing competitors to get a head start can lead to a dominant player capturing the market and making it difficult for new entrants to succeed. Thus, it is not a safe strategy.

In Industries That Have Increasing Returns to Adoption,allowing Competitors to Get