Two Companies Are About to Make a Decision Regarding an Investment

Multiple Choice

Two companies are about to make a decision regarding an investment in a new promotional campaign. Company A will either advertise in all media or advertise in newspapers only. Company B will either run a sweepstake or run a big sale. The payoff matrix is shown below. $\begin{array} { l l c c } \hline && { \text { Company B } } \\& &\mathrm { B } _ { 1 } : \text { Run a } & \mathrm { B } _ { 2 } : \text { Run a } \\& &\text { sweepstakes } & \text { big sale } \\\hline & \begin{array} { l } \text { A1: Advertise } \\\text { in all media }\end{array} & 4 &-1 \\\text { Company A } & \begin{array} { l } \text { A2: Advertise } \\\text { in newspapers only }\end{array} & - 2 & 1 \\\hline\end{array}$
Determine the proportion of time that Company B should employ each strategy.

A) B₁: 12.5%, B₂: 87.5%
B) B₁: 25%, B₂: 75%
C) B₁: 37.5%, B₂: 62.5%
D) B₁: 50%, B₂: 50%
E) B₁: 62.5%, B₂:37.5%