Answer: The sentence that uses a reciprocal pronoun correctly is “We were laughing at one another”.
Explanation: A reciprocal pronoun is a type of pronoun that is used when two or more people are acting in the same way towards the other. In other words, when using a reciprocal pronoun, the actions of the people involved correspond to one another. In English, there are two reciprocal pronouns “each other” and “one another”. In that way, the first sentence (“We were laughing at one another”) is the correct one because it includes the reciprocal pronoun “one another” and it makes reference to two or more people carrying out the same action, which is laughing, simultaneously. In contrast, the second sentence includes a reflexive pronoun (ourselves).