When a company is trying to win a format war, it should license its format for a low fee rather than a high fee.

Question

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By licensing the format for a low fee, more companies are likely to adopt the format, increasing its popularity and therefore increasing the likelihood of the format winning the war. Conversely, if the fee is too high, companies may be deterred from adopting the format, reducing its chances of success.

When a Company Is Trying to Win a Format War