Reference no: EM133063787

The table below shows the payoff matrix that represents the strategic interaction between Pepsi and Coca-Cola. As a major festive holiday is coming up soon, the two companies are deciding between two advertising strategies. The payoffs in the matrix below are provisional estimates of their subsequent net quarterly profits in millions of dollars.

		Coca-Cola
		Low spend	High spend
Pepsi	Low spend	200, 200	-50, 255
	High spend	265, -100	60, 50

Select all the correct answers.

Group of answer choices

1.If this is a repeated game, it is more likely that both companies would agree to only have a low spend on advertising compared to a one-shot game

2.In a one-shot, simultaneous game, both companies will likely agree to only have a low spend on advertising

3.If there was a legal limit on how much firms could spend on advertising, firms might be better off

4.If Pepsi only had a low spend on advertising, Coca-Cola could make a net quarterly profit of $255 million