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In the Following Games, All Payoffs Are Listed with the Row

Question 46

Multiple Choice

In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second. In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second.   -Game 8 shows the payoff matrix in terms of profit (in millions of dollars) for two possible strategies: advertise or do not advertise. If they legally could, why might the two companies agree to a binding contract committing both to not advertise? A) Because advertising is ineffective. B) Because advertising is too expensive. C) Because not advertising would lower the costs and therefore increase the profits to each firm. D) Because not advertising would lower profits.
-Game 8 shows the payoff matrix in terms of profit (in millions of dollars) for two possible strategies: advertise or do not advertise. If they legally could, why might the two companies agree to a binding contract committing both to not advertise?


A) Because advertising is ineffective.
B) Because advertising is too expensive.
C) Because not advertising would lower the costs and therefore increase the profits to each firm.
D) Because not advertising would lower profits.

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