The two leading U.S. manufacturers of high performance radial tires must set their advertising strategies for the coming year. Each firm has two strategies available: maintain current advertising or increase advertising by 15%. The strategies available to the two firms, G and B, are presented in the payoff matrix below.
Increase Adv. Maintain Adv.
Firm G Increase Adv. 27, 27 50, 12
Maintain Adv. 12, 50 45, 45
The entries in the individual cells are profits measured in millions of dollars. Firm G's outcome is listed before the
comma, and Firm B's outcome is listed after the comma.
Is there a dominant strategy for each firm? (Answer: Yes or No) What is it?
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