5. To advertise or not to advertise Suppose that Creamland and Dairy King are the only two firms that sell ice cream dollars) each company will eam depending on whether or not it advertises: The following payoff matrox shows the profit (in miliors of Dairy King Adverse Doesnt Advertise Advertise 9,9 15, 3 Creamland Doesnt Advertise 3.15 11, 11 For example, the upper nght col shows that e Creamland advertises and Dairy King doesn't advertise, Creamland will make a proit of $15 milion, and Dairy King wil make a proft of $3 milion. Assume this is a simutaneous game and that Creamland and Dary King are both proft- maximizno frms. If Creamland decides to advertise, t will earn a profit ofs milion Dary King advertises and a profit of milion it Dary King does not advertie. If Creamland decides not to advertise, it will earn a profit of milion if Dairy King advertises and a profit of milion Dary King does not advertise. DY Dairy ong advertises, Creamland makes a higher profit t chooses

5. To advertise or not to advertise Suppose that Creamland and Dairy King are the only two firms that sell ice greans the flowing payout shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises Dairy King Adverse Doesnt Advertise Creamland Advertise Doesn't Advertise 9,9 3.15 15,3 11, 111 > For example, the upper nght cot shows that & Creamland advertises and Dairy King doesn't advertise, Creamland will make a profit of $15 milion, and Darry King will make a profit of $3 million. Assume this is a simultaneous game and that Creamland and Dairy King are both prolix- mazing firms. at Creamland decides to advertise, will earn a profit of not advertise Creamland doodles net to advertise, it will earn a profit of does not advertise milion Dary King advertises and a profit of milion & Dairy King does Dairs King advertser, Creamland makes a higher profit Fx chooses milion if Dairy King advertises and a profit af malion if Dary ag