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Economics

Why would this be described as a Prisoner's Dilemma game?

The following matrix shows the payoffs for an advertising game between Coke and Pepsi. The firms can choose to advertise or to not advertise. Numbers in the matrix represent profits; the first number in each cell is the payoff to Coke. (Numbers in millions.)

Coke (rows)/Pepsi (columns) Advertise Don't Advertise
Advertise (10, 10) (500, -50)
Don't Advertise (-50, 500) (100, 100)

describe why this would be described as a Prisoner's Dilemma game.

describe the probable outcome of this game.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M927322

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