Next we check to see if Firm 2 has a dominant strategy. Suppose we look at the game from Firm 2's perspective. Suppose it knew somehow that Firm 1 was going to play strategy S1. If this were the case, Firm 2 could play strategy S1 and earn a payoff of 10 or play strategy S2 and earn a payoff of 12.
Where I come from 12 is larger than 10 so in this case, Firm 2 would play strategy S2.
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