As GMB and VolgaBus compete, GMB selects a new and superior brake technology. VolgaBus prefers a different brake technology, but feels trapped into selecting the same one used by GMB. This is called:
A) adverse selection.
B) first-mover advantage.
C) secure strategy.
D) extension form.

Question

Quizplus · Accepted Answer

This is an example of first-mover advantage, where GMB gains an advantage by selecting a superior brake technology first, and VolgaBus feels compelled to choose the same technology in order to remain competitive.

As GMB and VolgaBus Compete, GMB Selects a New and Superior