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:

Product Comparison Website

An online platform that enables consumers to compare the prices, features, and quality of products from different vendors.

Devalue

The reduction of the worth or value of a currency, asset, or commodity.

Brand Advocates

Individuals who enthusiastically promote and support a brand, often sharing positive experiences with others, thereby extending the brand's reach.

Specials

Promotional deals or products offered for a limited time to attract customers or boost sales.