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According to a spokesperson for Mcdonald's, ... for the past several years, our individual company growth has come out of the other fellow's hide.' a.

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According to a spokesperson for Mcdonald's, "... for the past several years, our individual company growth has come out of the other fellow's hide.' a. What implications does this statement have for the level of adver- tising in the hamburger industry? b. Using the following hypothetical payoff matrix, explain how trigger strategies can be used to support the collusive level of advertising in an infinitely repeated game. For what values of the interest can collusion be sustained? Firm B Advertise Don't Advertise Firm A Advertise (4, 4) (20, 1) Don't Advertise (1, 20) (10, 10)

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