Q. Suppose two competitors, McGraw-Hill, Inc. and Pearson, PLC., each face an important strategic decision concerning whether or not they should boost promotion on new product introductions. McGraw-Hill can choose either row in the payoff matrix defined below, whereas Pearson can choose either column. For McGraw-Hill the choice is either "boost promotion" or "hold promotion constant." For Pearson the choices are the same. Notice that neither organization can unilaterally choose a given cell in the profit payoff matrix. The ultimate result of this one-shot, simultaneous-move game depends upon the choices made by both competitors. In this payoff matrix the first number in each cell is the profit payoff to McGraw-Hill; the second number is the profit payoff to Pearson (in billions).

Pearson, PLC.

McGraw-Hill, Inc. Competitive Strategy Boost Promotion Hold Promotion Constant
Boost Promotion $750 million; $150 million $800 million; $100 million
Hold Promotion Constant $500 million; $200 million $900 million; $250 million

A. Are there dominant strategies for McGraw-Hill and Pearson? If so, illustrate what are they?

B. Are there secure strategies for McGraw-Hill and Pearson? If so, illustrate what are they?