In a competitive situation involving the adoption of a common standard by all firms in the industry:
A) each player should always adopt his own preferred standard to maximize profit.
B) the players will agree upon the standard that maximizes collective profits.
C) the use of dominant strategies will select the appropriate standard.
D) there will be multiple equilibria supporting different possible standards.
E) the players will agree on a compromise between their preferred standards.

Question

Quizplus · Accepted Answer

In a competitive situation involving the adoption of a common standard, there can be multiple equilibria supporting different possible standards. This is because each player wants to adopt the standard that maximizes their profit, but this may not be the same for all players. As a result, there can be multiple outcomes depending on which standard is ultimately adopted.

In a Competitive Situation Involving the Adoption of a Common