PI 4.3 Dominant Strategiss. Conceive of two competitors facing important strategic decisions where the payoff to each decision depends upon the reactions of the competitor. Firm A can choose either row in the payoff matrix defined below, whereas firm B can choose either column. For firm A the choice is either 'up' or 'down'; for firm B the choice is either 'left' or

'right'. Notice that neither firm can unilaterally choose a given cell in the profit payoff matrix.

The ultimate result of this one-shot, simultaneous-move game depends upon the choices made by both competitors. In this payoff matrix, strategic decisions made by firm A or firm B could signify decisions to offer a money-back guarantee, lower prices, offer free shipping, and so on.

The first number in each cell is the profit payoff to firm A; the second number is the profit payoff to firm B.