A strategic precommitment occurs when a firm
A) Commits to some actions before rivals take theirs, with the aim of increasing its future competitive profit
B) Commits to some actions after rivals take theirs, with the aim of increasing its future competitive profit
C) Commits to some actions before rivals take theirs purely by accident
D) Commits to some actions after rivals take theirs because there are no other options

Question

Quizplus · Accepted Answer

A strategic precommitment occurs when a firm commits to certain actions before its rivals take their actions with the aim of increasing future competitive profit. This implies that the firm is taking a deliberate and proactive approach to gain an advantage over its rivals.

A Strategic Precommitment Occurs When a Firm