Refer to the above payoff matrix for the profits (in $ millions) of two firms (A and B) making a decision to advertise or not. Which of the following is the outcome of the dominant strategy without cooperation?

A) Both firm A and firm B choose not to advertise.
B) Both firm A and firm B choose to advertise.
C) Firm A chooses to advertise while firm B chooses not to advertise.
D) Firm A chooses not to advertise while firm B chooses to advertise.

ANSWER:

B