338 STRATEGY ANALYSIS
Consider the situation from Coke’s viewpoint. If Pepsi maintains a high
price, Coke is better off discounting, getting a payoff of 70 compared with 50.
Similarly, if Pepsi discounts, Coke is still better off discounting, getting a
payoff of 10 compared with _10. Thus discounting is a dominant strategy for
Coke. By the same line of reasoning, discounting is also the dominant strategy
for Pepsi. We could also say that maintaining price is in this case a dominated
strategy for both firms; this means that it will always give a lower or equal
payoff, whatever the other player does.