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Two firms are deciding whether to adopt a new industry-wide software standard ('New') or continue using the old one ('Old'). Their profits are interdependent, as shown in the payoff matrix below. The first number in each cell is the profit for Firm 1, and the second is for Firm 2.
| Firm 2: New | Firm 2: Old | |
|---|---|---|
| Firm 1: New | (5, 5) | (1, 1) |
| Firm 1: Old | (1, 1) | (2, 2) |
Which outcome represents a Nash equilibrium that is also Pareto-inferior?
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