Strategic interaction between pepsi and coca-cola

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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

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

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

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

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

Reference no: EM133064284

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