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

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

Answer rating: 100% (QA)

Nash Evillibtiom It is a stable state where each player knows the equilibrium strategy of the other ... View the full answer