Use the game theory matrix below to anwrr the following ques

Use the game theory matrix below to an-wrr the following questions. Players: Coca-cola, Pepsi: Each company mast choose tin- size of its advertising budget. high budget, low budget Outcome: profit for each company Is there a dominant strategy foi Coca-cola? K mi. what is it? Is there a dominant strategy for Pepsi? If so. what is it? What are the Nash equilibria?

Solution

There is no dominant strategy for coca-cola. There is one optimal strategy for pepsi is 20<30 & 0<70 in between high budget and low budget. The nash equilibrium exists if no players change their strategy ,despite knowing the actions of their opponents . Then the nash equilbrium for the given problem is (30,20) i.e., 30>20 occurs in high budget of coca-cola and pepsi.