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The payoff table below show advertising decision game between Drink Fruity and Drink Gassy. The amou

Question: The payoff table below show advertising decision game between Drink Fruity and Drink Gassy. The amount are the payoffs x $1000 of dollars of annual profits.

Drink Fruity Advertisement Budget

Low Medium High

Drink Glassy Low $600, $600 $800, $700 $1,200, $700

Advertisement

Budget Medium $700, $500 $900, $450 $1,000, $750

High $250, $550 $350, $400 $850, $650

i. Does Drink Fruity have a dominated strategy in the original payoff table? If so, what is it? (2 marks)

ii. Does Drink Gassy have a dominated strategy in the original payoff table? If so, what is it? (2 marks)

iii. After the first round eliminating any dominated strategies that can be found in the original payoff table, describe the strategic situation facing the two companies. (2 marks)

iv. What is the likely outcome of the advertising decision?

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