13-64 The managers of Alpha and Beta must make repeated advertising decisions simultaneously at the beginning of every month. They choose either low or high levels of advertising expenditure. They both employ a discount rate of 2.5 percent per month. Beta's advertising High Low High A B Alpha's $7,000, $3,500 $2,000, $6,500 Advertising C D Low $8,000, $1,000 $4,000, $2,000 Payoffs in dollars of monthly profits. Chapter 13: STRATEGIC DECISION MAKING IN OLIGOPOLY MARKETS 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Beta expects punishment to last for two months after being caught (i.e., to be penalized in months 2 and 3). What would be the value-maximizing decision for Beta? a. Cooperate since $3,000 > Pl Benefits of cheating. b. Cooperate since $6,500/(1.025) > PV Benefits of cheating. C . Cheat since Pl Benefits of cheating > $2,820. d. Cheat since Pl Benefits of cheating