Laurel and Janet Are Competitors in a Local Market and Each

question 521

Multiple Choice

Laurel and Janet are competitors in a local market and each is trying to decide if it is worthwhile to advertise. If both of them advertise, each will earn a profit of $5,000. If neither of them advertise, each will earn a profit of $10,000. If one advertises and the other doesn't, then the one who advertises will earn a profit of $12,000 and the other will earn $2,000. In this version of the prisoners' dilemma, if the game is played only once, Laurel should

• A)advertise, but if the game is to be repeated many times she should probably not advertise.
• B)advertise, and if the game is to be repeated many times she should still probably advertise.
• C)not advertise, but if the game is to be repeated many times she should probably advertise.
• D)not advertise, and if the game is to be repeated many times she should still not advertise.

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Definitions:

Intelligence

The ability to acquire and apply knowledge and skills.

Microprocessor

A central processing unit manufactured on a single integrated-circuit chip (or several chips) by utilizing large-scale integration technology.

Network Switch

A networking device that connects devices together on a computer network, using packet switching to receive, process, and forward data to the destination device.

Hub

A common connection point for devices in a network, which is used to connect segments of a LAN and manage data traffic.