Tobacco companies did not resist the advertising ban instituted in 1970 because they actually increased profits by not being allowed to advertise. This ban forced these companies to abandon their dominant strategy of advertising and wind up at a cooperative outcome of not advertising. Prior to the ban, the tobacco companies were involved in playing

Question

Quizplus · Accepted Answer

The situation described is a classic example of a prisoner's dilemma game, where each company would benefit from advertising (defecting) while the other does not, but if both choose to advertise, they are worse off than if neither did. The ban effectively forced them into the cooperative outcome (not advertising), which was better for them than the equilibrium they were in when they could advertise.

Tobacco Companies Did Not Resist the Advertising Ban Instituted in 1970