In industries that have increasing returns to adoption due to network externalities,allowing competitors to get a head start in building an installed base is the safest strategy.

Question

Quizplus · Accepted Answer

In industries with network externalities, there are increasing returns to adoption, which means that the value of a product or service increases as more people use it. Therefore, allowing competitors to get a head start can be risky, as they can build a large installed base and create a barrier for entry. It may be safer to invest in building an installed base early on to gain a competitive advantage.

In Industries That Have Increasing Returns to Adoption Due to Network