Use the Following to Answer Question

question 17

Multiple Choice

Use the following to answer question:
-(Table: Coke and Pepsi Advertising Game) Use Table: Coke and Pepsi Advertising Game.The soft-drink industry is dominated by Coca-Cola and Pepsi,and each firm spends a lot of money on advertising.Suppose each firm is considering a costly television commercial during halftime of the Super Bowl.The table shows the payoff matrix of profits that each firm would receive from their advertising decision,given the advertising decision of their rival.Profits in each cell of the payoff matrix are given as (Coke,Pepsi) .If both firms expect to play this game repeatedly (every year for the foreseeable future) and they use a tit-for-tat strategy,in equilibrium,Coke _____ and Pepsi _____.

• A)advertises;does not advertise
• B)does not advertise;advertises
• C)does not advertise;does not advertise
• D)advertises;advertises

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Definitions:

Delayed

Pertaining to something that has been postponed or set to occur at a later time than originally planned.

Monthly

Pertaining to something that occurs, repeats, or is calculated on a monthly basis.

BAT Model

Behavioral Analysis of Teams Model; a framework for analyzing team performance and dynamics, focusing on behavior as the primary factor.