Based on the feature \"Strategic Advertising,\" would cola advertising or cigare

Question

Based on the feature "Strategic Advertising," would cola advertising or cigarette advertising correspond more closely to a prisoners' dilemma game? The prisoners' dilemma game is represented most closely by A. 0 B. O C. 0 D. 0 E. cola advertising because the firms' dominant strategy is to advertise, but not advertising maximizes Joint profits. cigarette advertising because the firms' dominant strategy is to not advertise, but advertising is the Nash equilibrium. cigarette advertising because the firms do not have dominant advertising strategies, but advertise anyway. cigarette advertising because the firms advertise since advertising satisfies the Pareto Criterion. cola advertising because the industry advertises collectively, but individual firm advertising is a best response.

Explanation / Answer

Ans:

Option C

cigarette advertising because the firms do not have dominant advertising strategies,but advertise anyway.

Advertising is called as a real-example of the prisoner’s dilemma.when firms would benefit from a reduction in advertising but this choice  is dependent on what the other firm chooses.Hence there is no  dominant strategy.

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