Question 1

The analysis of games of plain substitutes and complements:

Accepted Answer

A) proves that most social relationships lead to achieving full economic potential. 
B) is a diagnostic tool needed to define optimal outcomes. 
C) show the need for a better equilibrium concept other than the Nash equilibrium. 
D) indicate the direction of the bias introduced by the pursuit of self- interest. 
A) proves that most social relationships lead to achieving full economic potential. 
B) is a diagnostic tool needed to define optimal outcomes. 
C) show the need for a better equilibrium concept other than the Nash equilibrium. 
D) indicate the direction of the bias introduced by the pursuit of self- interest. D

Question 2

In the game of PUT (P)and KEEP (K)each child was given nine dollars and, if they chose to put it back, six dollars was added to the nine and the two children shared the total pot of money. What is the dominant strategy?

Accepted Answer

A) (K, K) 
B) (P, K) 
C) (K, P) 
D) (P, P) 
A) (K, K) 
B) (P, K) 
C) (K, P) 
D) (P, P) A

Question 3

Often, oligopolists act without the benefit of communication. As a result they choose strategies that lead to lower profits than what could have been achieved with cooperation. This situation is known as:

Accepted Answer

A) the minimax strategy. 
B) the collusion outcome. 
C) the prisoner's dilemma. 
D) a compromise. 
A) the minimax strategy. 
B) the collusion outcome. 
C) the prisoner's dilemma. 
D) a compromise. C

Question 4

Team production is an example of:

Accepted Answer

A) a game of plain substitutes. 
B) a game of chicken. 
C) a game of coordination. 
D) a game of plain complements. 
A) a game of plain substitutes. 
B) a game of chicken. 
C) a game of coordination. 
D) a game of plain complements.

Question 5

In the 1983 MGM movie Wargames, starring Matthew Broderick and Ally Sheedy, a supercomputer is programmed to simulate global thermonuclear war. Using game theory predict the dominant strategy determined by the computer.

Accepted Answer

If one country starts a nuclear war the

Question 6

The best response function is:

Accepted Answer

A) the strategy that increases the payoff. 
B) the strategy that best uses the available information. 
C) the strategy that leads to the highest payoff regardless of what the other players do. 
D) the strategy that maximizes one's payoff given the action of the other players. 
A) the strategy that increases the payoff. 
B) the strategy that best uses the available information. 
C) the strategy that leads to the highest payoff regardless of what the other players do. 
D) the strategy that maximizes one's payoff given the action of the other players.

Question 7

In a game of plain complements:

Accepted Answer

A) the cross- effects in the payoff functions are positive. 
B) there is no lens of missed opportunities. 
C) there are mutual negative externalities. 
D) the cross- effects in the payoff functions are negative. 
A) the cross- effects in the payoff functions are positive. 
B) there is no lens of missed opportunities. 
C) there are mutual negative externalities. 
D) the cross- effects in the payoff functions are negative.

Question 8

A dominant strategy is one that:

Accepted Answer

A) combines pure and mixed strategies. 
B) is chosen by the player regardless of the best response by the other player. 
C) brings losses for the player. 
D) restricts the freedom of choice. 
A) combines pure and mixed strategies. 
B) is chosen by the player regardless of the best response by the other player. 
C) brings losses for the player. 
D) restricts the freedom of choice.

Question 9

Provide one example for each of the following: 1)a game of plain substitutes, 2)a game of plain complements, 3)a game of discoordination

Accepted Answer

Two roommates who smoke in their common

Question 10

A Nash equilibrium occurs when:

Accepted Answer

A) each firm is doing the best it can given its opponents' actions. 
B) there is no dominant firm in a market. 
C) each firm chooses the strategy that maximizes its minimum gain. 
D) a player can choose a strategy that is optimal regardless of its rivals' actions. 
A) each firm is doing the best it can given its opponents' actions. 
B) there is no dominant firm in a market. 
C) each firm chooses the strategy that maximizes its minimum gain. 
D) a player can choose a strategy that is optimal regardless of its rivals' actions.

Question 11

Two athletes contemplating the simultaneous use of performance enhancing drugs:

Accepted Answer

A) play a game of plain complements. 
B) play a game other than prisoner's dilemma. 
C) show poor sportsmanship. 
D) will end up using too much drugs. 
A) play a game of plain complements. 
B) play a game other than prisoner's dilemma. 
C) show poor sportsmanship. 
D) will end up using too much drugs.

Question 12

Fergie and Abdul were caught by the police in the vicinity of a robbery site. The police have a strong feeling the two individuals are the actual robbers, but they do not have a way to prove it yet. In the absence of hard evidence, the prosecutor can convict them of only a minor offence, with only a year in prison. The police put the two in separate rooms and try to offer them incentives to confess: if one of the robbers does so, he would go
scot- free while the other goes to prison for 10 years. If both confess the prosecutor will be able to put both in prison for 5 years. As a result, each partner in crime has two options: to confess or to remain silent.
Note: here payoffs are in years of prison, so less is better.
a)Represent this game in normal form. Are there dominant strategies for these robbers?
b)What s the Nash equilibrium of this game?
c)How is this game called?
d)What exactly is the dilemma that the two robbers have? Is there a way to get around this problem

Accepted Answer

a)Confess is dominant strategy for each

Question 13

All but which of the following constitutes a Nash equilibrium?

Accepted Answer

A) collusive solution 
B) Cournot equilibrium 
C) noncooperative equilibrium 
D) Bertrand equilibrium 
A) collusive solution 
B) Cournot equilibrium 
C) noncooperative equilibrium 
D) Bertrand equilibrium

Question 14

A coordination game:

Accepted Answer

A) covers most market situations. 
B) cannot yield a Nash equilibrium. 
C) usually has more than one equilibrium. 
D) result in a final outcome that is uncertain. 
A) covers most market situations. 
B) cannot yield a Nash equilibrium. 
C) usually has more than one equilibrium. 
D) result in a final outcome that is uncertain.

Question 15

Competitive equilibrium and Nash equilibrium:

Accepted Answer

A) are such that competitive equilibria are a subset of Nash equilibria. 
B) are such that Nash equilibria are a subset of competitive equilibria. 
C) are not related. 
D) are inconsistent with each other. 
A) are such that competitive equilibria are a subset of Nash equilibria. 
B) are such that Nash equilibria are a subset of competitive equilibria. 
C) are not related. 
D) are inconsistent with each other.

Question 16

In a game of plain substitutes with simultaneous moves, the lens of missed opportunity is:

Accepted Answer

A) a set of possible outcomes that are inferior to the Nash equilibrium. 
B) a lens- shaped area situated to the southwest of the Nash equilibrium. 
C) attainable in a one- shot game. 
D) a set of possible outcomes that involve higher strategies values by both players. 
A) a set of possible outcomes that are inferior to the Nash equilibrium. 
B) a lens- shaped area situated to the southwest of the Nash equilibrium. 
C) attainable in a one- shot game. 
D) a set of possible outcomes that involve higher strategies values by both players.

Question 17

Subgame perfection

Accepted Answer

A) is a concept applied to complex on- shot games. 
B) yields several equilibria. 
C) is obtained via forward induction. 
D) is a refinement of Nash equilibrium. 
A) is a concept applied to complex on- shot games. 
B) yields several equilibria. 
C) is obtained via forward induction. 
D) is a refinement of Nash equilibrium.

Question 18

Which of the following is true?

Accepted Answer

A) All games have at least a dominated strategy. 
B) All games have at least a dominant strategy. 
C) Games may or may not end up having dominated or dominating strategies. 
D) A Nash equilibrium in pure strategies requires at least a dominating strategy. 
A) All games have at least a dominated strategy. 
B) All games have at least a dominant strategy. 
C) Games may or may not end up having dominated or dominating strategies. 
D) A Nash equilibrium in pure strategies requires at least a dominating strategy.

Question 19

In a game of plain substitutes:

Accepted Answer

A) there is a negative relationship between the players' payoffs. 
B) there is no relationship between a player's strategy and the payoff of the other player. 
C) there is a positive relationship between a player's strategy an the payoff of the other player. 
D) there is a negative relationship between a player's strategy and the payoff of the other player. 
A) there is a negative relationship between the players' payoffs. 
B) there is no relationship between a player's strategy and the payoff of the other player. 
C) there is a positive relationship between a player's strategy an the payoff of the other player. 
D) there is a negative relationship between a player's strategy and the payoff of the other player.

Question 20

The strategies are ranked by each player according to the:

Accepted Answer

A) levels of profit. 
B) likelihood of success. 
C) value of payoffs. 
D) consumption patterns. 
A) levels of profit. 
B) likelihood of success. 
C) value of payoffs. 
D) consumption patterns.

The analysis of games of plain substitutes and complements:

In the game of PUT (P)and KEEP (K)each child was given nine dollars and, if they chose to put it back, six dollars was added to the nine and the two children shared the total pot of money. What is the dominant strategy?

Often, oligopolists act without the benefit of communication. As a result they choose strategies that lead to lower profits than what could have been achieved with cooperation. This situation is known as:

Team production is an example of:

In the 1983 MGM movie Wargames, starring Matthew Broderick and Ally Sheedy, a supercomputer is programmed to simulate global thermonuclear war. Using game theory predict the dominant strategy determined by the computer.

The best response function is:

In a game of plain complements:

A dominant strategy is one that:

Provide one example for each of the following: 1)a game of plain substitutes, 2)a game of plain complements, 3)a game of discoordination

A Nash equilibrium occurs when:

Two athletes contemplating the simultaneous use of performance enhancing drugs:

All but which of the following constitutes a Nash equilibrium?

A coordination game:

Competitive equilibrium and Nash equilibrium:

In a game of plain substitutes with simultaneous moves, the lens of missed opportunity is:

Subgame perfection

Which of the following is true?

In a game of plain substitutes:

The strategies are ranked by each player according to the:

Microeconomics: a Working Methodology

A Theory of Preferences

Demand Theory

More Demand Theory

Intertemporal Decision Making and Capital Values

Production Cost: One Variable Input

Production Cost: Many Variable Inputs

The Theory of Perfect Competition

Applications of the Competitive Model

Monopoly

Input Markets and the Allocation of Resources

Labour Market Applications

Competitive General Equilibrium

Price Discrimination Monopoly Practices

Game Theory and Oligopoly

Choice Making Under Uncertainty

Assymmetric Information, the Rules of the Game, and Externalities

The Theory of the Firm

Assymetric Information and Market Behaviour

Filters

Exam 15: Introduction to Game Theory

The analysis of games of plain substitutes and complements:

In the game of PUT (P)and KEEP (K)each child was given nine dollars and, if they chose to put it back, six dollars was added to the nine and the two children shared the total pot of money. What is the dominant strategy?

Often, oligopolists act without the benefit of communication. As a result they choose strategies that lead to lower profits than what could have been achieved with cooperation. This situation is known as:

Team production is an example of:

In the 1983 MGM movie Wargames, starring Matthew Broderick and Ally Sheedy, a supercomputer is programmed to simulate global thermonuclear war. Using game theory predict the dominant strategy determined by the computer.

The best response function is:

In a game of plain complements:

A dominant strategy is one that:

Provide one example for each of the following: 1)a game of plain substitutes, 2)a game of plain complements, 3)a game of discoordination

A Nash equilibrium occurs when:

Two athletes contemplating the simultaneous use of performance enhancing drugs:

All but which of the following constitutes a Nash equilibrium?

A coordination game:

Competitive equilibrium and Nash equilibrium:

In a game of plain substitutes with simultaneous moves, the lens of missed opportunity is:

Subgame perfection

Which of the following is true?

In a game of plain substitutes:

The strategies are ranked by each player according to the:

Microeconomics: a Working Methodology

A Theory of Preferences

Demand Theory

More Demand Theory

Intertemporal Decision Making and Capital Values

Production Cost: One Variable Input

Production Cost: Many Variable Inputs

The Theory of Perfect Competition

Applications of the Competitive Model

Monopoly

Input Markets and the Allocation of Resources

Labour Market Applications

Competitive General Equilibrium

Price Discrimination Monopoly Practices

Game Theory and Oligopoly

Choice Making Under Uncertainty

Assymmetric Information, the Rules of the Game, and Externalities

The Theory of the Firm

Assymetric Information and Market Behaviour

Filters