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AT&T and MCI are competing in the long-distance telephone market. Both companies are considering whether...

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Accounting

AT&T and MCI are competing in the long-distance telephone market. Both companies are considering whether to offer a discount calling plan to attract new customers. Their payoffs depend as follows on the combinations of strate- gies chosen:
If both companies offer discount calling plans, then each company loses $8 million.
If AT&T offers a discount calling plan and MCI does not, then AT&T makes a profit of $15 million and MCI suffers a loss of $12 million.
If MCI offers a discount calling plan and AT&T does not, then MCI makes a profit of $5 million and AT&T suffers a loss of $6 million.
If neither company offers a discount calling plan, each makes a profit of $6 million.

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