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What about Firm 2, does it have a dominant strategy? By looking at only the payoffs to Firm 2 we can see easily that it does not.
If Firm 1 plays S1 Firm 2 will play its S1 earning a payoff of 15 rather than 9. On the other hand, if Firm 1 plays S2, Firm 2 will play its S2 earning a payoff of 11 rather than 9. In this case the best strategy for Firm 2 depends on what Firm 1 does, so no strategy is dominant for Firm 2.
Since only one of the two players has a dominant strategy, can we predict how this game will be played if it is played only one time, the way we could if both players had dominant strategies?
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