Pepsi is considering an expensive advertising campaign to steal market share from Coca-Cola. Why might both companies have a dominant strategy to advertise, even if advertising attracts few new customers to the cola drink industry?

The dominant strategy for both firms may be to pursue an aggressive, even expensive, advertising campaign in order to protect against the potential erosion of their own market shares. Advertising may simply be "defensive" in nature. If Coca-Cola anticipates that Pepsi will launch the new ad campaign, it is likely to launch its own campaign to thwart the ability of Pepsi to lure customers away.