The following is a payoff matrix showing profit in millions of dollars when two companies

simultaneously decide on various advertising budgets ($1 million, $2 million, or $3 million):

Pizza Hut

$1 mill $2 mill $3 mill

$1 mill $310 / $415 290 / 420 260 / 390

Papa Johns $2 mill 270 / 410 280 / 405 250 / 380

$3 mill 305 / 395 300 / 400 270 / 375

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a. In the first round of strategy elimination (when all three possible budgets are under

consideration), which ad budget would the companies exclude?

b. After the first round of elimination (previous question), would either company make a

second-round elimination?

c. What would be the likely outcome of this simultaneous advertising decision (i.e. what ad

budget would each company end up choosing)?