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Suppose that two firms, tuchy Bird and Full Coop, are the only sellers of seltan butfalo wings in some bypothetical market. The following payoif matrix

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Suppose that two firms, tuchy Bird and Full Coop, are the only sellers of seltan butfalo wings in some bypothetical market. The following payoif matrix gives the profit (in millions of dollars) earned by each company depending on whether ar not it chooses to advertise: For example, the lewer lert cell of the matruc shows that if Fulf Coop advertises and Lucky bind does not advertise, Full Coop will make a proft of $1d. million, and tucky bird wal make a proft of 52 mition. Assume this is a simultanegus game and that Lucky Bird and Full Coop are both profitmaxdiniting firms If Lucky fird chooses to advertise, it will esm a profit of advertione. If Lucky Bird chooses not to advertise, it will earn a profit of not adyertise If Full coop advertises. Lucky Bird makes a higher profit if it chooses If ful Coop doesn't advertise, Lucky Bird makes a higher proft if it chooses. Supoose that poth firms start off by deciding not to advertise. If the fitms act independently, what strategies wil they end up choosing? Hoth firms will choose to advertise. Luchy Bird will choose not to advertise and Full Coop will choose to adyertise. Lucky Bird will choose to advertise and Full Coop will choose not to advertise- If Luchy Bird chooses to advertise, it will earn s profit of million if Full Coop advertises and a proht of million if Fualt Coop does not advertise. If Lucky Bird chooses not to advertice, it will eam a profit of not advertise. If Full coop advertises, Lucky Bird makes a higher profit if it chooses If futi coop doesa't advertice, tuchy Bird makesia higher profit if it chooses -Suppose that both firms start off by deciding not to advertise If the firms act independently, what strategies will they end up choosing? Both firms will choose to advertise. Lucky Bind will choose not to advertise and full Coop will choose to advertise. Lucky Brd will choose to advertise and Fuil Coop will choose not to advertise. Both firms will choote not ta advertise. Agaio, suppote that both firms start off not adyertising. If the firms decide to collude, what strategies will they end up choosing? Lucky Bird will choose to advertise and full Coop will choose not to advertise. tucky Bird will chaose nat to advertise and Full Coop will choose to advertise. foth firms will choose not to advertise. Both firms will choose to adveruse

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