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If United expects that American will raise ad spending, should United raise ad spending or leave it the same? American Raise
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Answer #1

Raise ad spending

Explanation: If American increases ad spending and United leave it the same, United's payoff is $2,000.

However, if American increases ad spending and United also increases it, United's payoff is $5,500.

So, United should increase ad spending in order to increase its pay off.

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