Question
Anna, Bill, and Charles are competitors in a local market, and each is trying to decide if it is worthwhile to advertise. If all of
Anna, Bill, and Charles are competitors in a local market, and each is trying to decide if it is worthwhile to advertise. If all of them advertise, each will earn a profit of $5000. If none of them advertise, each will earn a profit of $8000. If only one of them advertises, the one who advertises will earn a profit of $10,000 and the other two will each earn $2000. If two of them advertise, those two will each earn a profit of $6000 and the other one will earn $1000. If all three follow their dominant strategy, what will Anna do and how much will she earn?
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