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

Advertise

Explanation:

Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.

Dominant strategy is the best option for a player regardless of what the other player is playing.

Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.

Prisoners dilemma is a form of game theory that examines individuals might not cooperate even though it would be in their best interest to cooperate.

The payoffs of advertising is either $5,000 or $12,000

The payoffs of not advertising is either $12,000 or $2,000.

If the game is repeated once, the best strategy is to advertise because the payoffs of advertising is greater than the payoffs of not advertising.

I hope my answer helps you

answer; microeconomics;