Decision making by using game theory

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Reference no: EM1312000

Budweiser, Miller and Coors who together produce 80% of all beer consumed in the US, each spend well over $250 million a year on television advertising campaigns, promoting their beer brands. Obviously, if one firm is advertising its brands heavily, the others must also advertise to defend their market shares.

Do you think these firms would welcome congressional legislation which restricted the amount that any one firm could spend on advertising to $1 million yearly, and thereby allowed them all to reduce their costs without fear of losing ground to each other? Explain your answer.

Reference no: EM1312000

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