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... Each firm can either raise the price of its product or leave it unchanged. We further assume that each firm has its own expectation concerning its profit change as result from each strategy. The game is a zero sum game, meaning that any gain by one player is exactly related to a loss in the second player. Therefore one firm will decide to leave its price unchanged because that if it raises its price it will gain a profit only if the second firm will raise its price too. If the second firm would have changed the price then it would have losses, although if it does not react to the price change, it will lose but still not as much as before. Hence both firms will leave the price unchanged, and the firms will have to use other objects to compete with on another. Interdependence limits the ability of oligopolistic firms to exploit markets to their own benefits. Although oligopoly has more than one firm in the market, in order to dominant in the market the firm has to have strong brands. A strong brand has major advantages for a producer. A strong brand has few substitutes as far as the costumer concern. Thus, the firm can increase the price for the good, and by that have a monopoly and the demand for it will not fall greatly (Anderton, Alain). In order to appreciate oligopoly better, Pepsi Cola and Coca Cola are the best examples, because they are two known, big firms that act in an oligopolisitc market. The Cola War "Everyone knows that Pepsi Cola and Coca Cola will always be different but the price is not an issue", said Maurice Tan the marketing manager of Pepsi Cola in Shanghai, China (personal interview). He claims this because of the fact that both of the companies are big and has established themselves already in China. Therefore there is no use to competing on price, "price competition just causes problems" as Tan says. "Being first in China, we have become what is called a 'price leader', and therefore there is no competition from our side of the game" says Summata, marketing manager of Coca Cola in Shanghai, China (personal interview). He claims that competing on price will not give yield to any of the companies. That is why we can see that the price of both Coca Cola and Pepsi Cola ...