1. **State the problem:** We need to determine if Williams and Red Bull have dominant strategies based on the given payoff matrix for their spending decisions on aerodynamic development. 2. **Recall the definition of a dominant strategy:** A dominant strategy is one that results in a higher payoff for a player regardless of the other player's choice. 3. **Analyze Williams' payoffs:** - If Red Bull raises spending: - Williams increases spending: 360 points - Williams does not change spending: 142 points - If Red Bull does not change spending: - Williams increases spending: 378 points - Williams does not change spending: 454 points 4. **Compare Williams' payoffs:** - When Red Bull raises spending, Williams earns more by increasing spending (360 > 142). - When Red Bull does not change spending, Williams earns more by not changing spending (454 > 378). 5. **Conclusion for Williams:** Williams does not have a dominant strategy because their best choice depends on Red Bull's action. 6. **Analyze Red Bull's payoffs:** - If Williams increases spending: - Red Bull raises spending: 354 points - Red Bull does not change spending: 153.5 points - If Williams does not change spending: - Red Bull raises spending: 460 points - Red Bull does not change spending: 400 points 7. **Compare Red Bull's payoffs:** - When Williams increases spending, Red Bull earns more by raising spending (354 > 153.5). - When Williams does not change spending, Red Bull earns more by raising spending (460 > 400). 8. **Conclusion for Red Bull:** Red Bull has a dominant strategy to raise spending because it yields higher payoffs regardless of Williams' choice. **Final answers:** - Williams does not have a dominant strategy. - Red Bull's dominant strategy is to raise spending.