Question 1

A coordination game

Accepted Answer

A) is a game with multiple Nash equilibria where players can credibly coordinate to select one of the equilibria. 
B) is a game where players coordinate to maximize joint profits. 
C) cannot be solved with cheap talk. 
D) always has one Nash equilibrium and no dominated strategies. 
A) is a game with multiple Nash equilibria where players can credibly coordinate to select one of the equilibria. 
B) is a game where players coordinate to maximize joint profits. 
C) cannot be solved with cheap talk. 
D) always has one Nash equilibrium and no dominated strategies.

Question 2

The winner's curse occurs when

Accepted Answer

A) bidders "shade" their bids. 
B) the winning bid is higher than the good's common value. 
C) the winner buys something he didn't need. 
D) the winning bid is higher than the private value of the good. 
A) bidders "shade" their bids. 
B) the winning bid is higher than the good's common value. 
C) the winner buys something he didn't need. 
D) the winning bid is higher than the private value of the good.

Question 3

-The above figure shows a payoff matrix for two firms, A and B, that must choose between a high-price strategy and a low-price strategy. For firm B

Accepted Answer

A) setting a high price is the dominant strategy. 
B) setting a low price is the dominant strategy. 
C) there is no dominant strategy. 
D) doing the opposite of firm A is always the best strategy. 
A) setting a high price is the dominant strategy. 
B) setting a low price is the dominant strategy. 
C) there is no dominant strategy. 
D) doing the opposite of firm A is always the best strategy.

Question 4

In a static game, firms

Accepted Answer

A) compete multiple times until there is a winner. 
B) compete only once. 
C) must have complete information. 
D) act sequentially. 
A) compete multiple times until there is a winner. 
B) compete only once. 
C) must have complete information. 
D) act sequentially.

Question 5

One reason that it might be difficult for a player to determine his best strategy is that

Accepted Answer

A) he might have limited ability to calculate the possible outcomes. 
B) he is irrational. 
C) there is no pure strategy. 
D) there are multiple Nash equilibria. 
A) he might have limited ability to calculate the possible outcomes. 
B) he is irrational. 
C) there is no pure strategy. 
D) there are multiple Nash equilibria.

Question 6

After analyzing his opponent, a tennis player decides to serve 10% of his serves to the left, 50% of his serves to the right, and 40% of his serves at the body of his opponent. This illustrates a

Accepted Answer

A) deterministic strategy. 
B) dominant strategy. 
C) mixed strategy. 
D) non-game theoretic problem. 
A) deterministic strategy. 
B) dominant strategy. 
C) mixed strategy. 
D) non-game theoretic problem.

Question 7

Communication between players prior to the start of a game that does NOT affect the payoffs is called

Accepted Answer

A) cheap talk. 
B) ineffective bargaining. 
C) a binding verbal contract. 
D) pareto efficient. 
A) cheap talk. 
B) ineffective bargaining. 
C) a binding verbal contract. 
D) pareto efficient.

Question 8

Which of the following statements is TRUE about a non-cooperative game?

Accepted Answer

A) When two players each have a dominant strategy, joint profits may not be maximized. 
B) When two players each have a dominant strategy, joint profits are maximized. 
C) When players use their best responses, joint profits are maximized. 
D) None of the above. 
A) When two players each have a dominant strategy, joint profits may not be maximized. 
B) When two players each have a dominant strategy, joint profits are maximized. 
C) When players use their best responses, joint profits are maximized. 
D) None of the above.

Question 9

If the payoff to the United States to pursuing nuclear weapons is 100 if the USSR does not pursue nuclear weapons and 50 if the USSR does, and the payoff to the USSR to pursuing nuclear weapons is 80 if the USA doesn't pursue nuclear weapons and 30 if the USA does, what is the non-cooperative equilibrium?

Accepted Answer

A) The USA pursues nuclear weapons; the USSR does not. 
B) The USA pursues nuclear weapons; the USSR pursues nuclear weapons. 
C) The USA does not pursue nuclear weapons; the USSR does not pursue nuclear weapons. 
D) The USA does not pursue nuclear weapons; the USSR does pursue nuclear weapons. 
A) The USA pursues nuclear weapons; the USSR does not. 
B) The USA pursues nuclear weapons; the USSR pursues nuclear weapons. 
C) The USA does not pursue nuclear weapons; the USSR does not pursue nuclear weapons. 
D) The USA does not pursue nuclear weapons; the USSR does pursue nuclear weapons.

Question 10

In Dutch or first-price sealed-bid auctions, participants will bid less than their highest valuation.

Accepted Answer

A) True 
 B)False

Question 11

Rock-paper-scissors (Roshambo)is an example of a ________ game.

Accepted Answer

A) simultaneous 
B) sequential 
C) dominant strategy 
D) weakly dominant 
A) simultaneous 
B) sequential 
C) dominant strategy 
D) weakly dominant

Question 12

-The above figure shows the payoff to two airlines, A and B, of serving a particular route. If the two airlines must decide simultaneously, which one of the following statements is TRUE?

Accepted Answer

A) Firm A does not have a dominant strategy. 
B) Firm B does not have a dominant strategy. 
C) Neither firm entering is a Nash equilibrium. 
D) The outcome of the game is unpredictable. 
A) Firm A does not have a dominant strategy. 
B) Firm B does not have a dominant strategy. 
C) Neither firm entering is a Nash equilibrium. 
D) The outcome of the game is unpredictable.

Question 13

Which of the following is a simultaneous decision game?

Accepted Answer

A) Tic-tac-toe 
B) Chess 
C) Poker 
D) Rock-paper-scissors (Roshambo) 
A) Tic-tac-toe 
B) Chess 
C) Poker 
D) Rock-paper-scissors (Roshambo)

Question 14

A Nash bargaining solution

Accepted Answer

A) is not the same as a Nash equilibrium. 
B) is derived from a Nash equilibrium. 
C) gives a solution in both cooperative and non-cooperative games. 
D) None of the above. 
A) is not the same as a Nash equilibrium. 
B) is derived from a Nash equilibrium. 
C) gives a solution in both cooperative and non-cooperative games. 
D) None of the above.

Question 15

Suppose two firms, A and B, are simultaneously considering entry into a new market. If neither enters, both earn zero. If both enter, they both lose 100. If one firm enters, it gains 50 while the other earns zero. Set up the payoff matrix for this game and determine if any Nash equilibria exist. Can you predict the outcome? What if firm A gets to decide first?

Accepted Answer

@#IMG-DLM& See the above figure. There are two Nas

Question 16

If each player in a game uses a strategy that results in a Nash equilibrium outcome, the players are most likely to say

Accepted Answer

A) "I don't like my choice, because I think I could have done better." 
B) "Given the strategies chosen by the other players in the game, I probably could have done better if I had more time." 
C) "Given the strategies chosen by the other players in the game, I made the best possible choice." 
D) "There was no real strategy on my part, I basically made an educated guess." 
A) "I don't like my choice, because I think I could have done better." 
B) "Given the strategies chosen by the other players in the game, I probably could have done better if I had more time." 
C) "Given the strategies chosen by the other players in the game, I made the best possible choice." 
D) "There was no real strategy on my part, I basically made an educated guess."

Question 17

In a first-price sealed-bid auction, the winner pays

Accepted Answer

A) its own, highest bid. 
B) the amount bid by the runner-up. 
C) the average of the three highest bids. 
D) the common value. 
A) its own, highest bid. 
B) the amount bid by the runner-up. 
C) the average of the three highest bids. 
D) the common value.

Question 18

-The above figure shows the payoff to two airlines, A and B, of serving a particular route. If the two airlines must decide simultaneously, what will happen if the government offers a $30 subsidy to airlines that serve this route?

Accepted Answer

A) Both firms will enter profitably. 
B) Firm A will decide not to enter since firm B will. 
C) Firm B is still better off not entering. 
D) Neither firm will have a dominant strategy. 
A) Both firms will enter profitably. 
B) Firm A will decide not to enter since firm B will. 
C) Firm B is still better off not entering. 
D) Neither firm will have a dominant strategy.

Question 19

A game includes

Accepted Answer

A) a strategy. 
B) payoffs. 
C) rules. 
D) All of the above. 
A) a strategy. 
B) payoffs. 
C) rules. 
D) All of the above.

Question 20

Not all games with two or more Nash equilibria can be solved with pre-play communication because

Accepted Answer

A) cheap talk may be illegal under anti-trust laws. 
B) if there's an incentive for one or more players to lie, then cheap talk lacks credibility. 
C) Pareto Criterion might not be defined. 
D) Both A and B 
A) cheap talk may be illegal under anti-trust laws. 
B) if there's an incentive for one or more players to lie, then cheap talk lacks credibility. 
C) Pareto Criterion might not be defined. 
D) Both A and B

A coordination game

The winner's curse occurs when

-The above figure shows a payoff matrix for two firms, A and B, that must choose between a high-price strategy and a low-price strategy. For firm B

In a static game, firms

One reason that it might be difficult for a player to determine his best strategy is that

After analyzing his opponent, a tennis player decides to serve 10% of his serves to the left, 50% of his serves to the right, and 40% of his serves at the body of his opponent. This illustrates a

Communication between players prior to the start of a game that does NOT affect the payoffs is called

Which of the following statements is TRUE about a non-cooperative game?

In Dutch or first-price sealed-bid auctions, participants will bid less than their highest valuation.

Rock-paper-scissors (Roshambo)is an example of a ________ game.

-The above figure shows the payoff to two airlines, A and B, of serving a particular route. If the two airlines must decide simultaneously, which one of the following statements is TRUE?

Which of the following is a simultaneous decision game?

A Nash bargaining solution

If each player in a game uses a strategy that results in a Nash equilibrium outcome, the players are most likely to say

In a first-price sealed-bid auction, the winner pays

-The above figure shows the payoff to two airlines, A and B, of serving a particular route. If the two airlines must decide simultaneously, what will happen if the government offers a $30 subsidy to airlines that serve this route?

A game includes

Not all games with two or more Nash equilibria can be solved with pre-play communication because

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 12: Game Theory and Business Strategy

A coordination game

The winner's curse occurs when

-The above figure shows a payoff matrix for two firms, A and B, that must choose between a high-price strategy and a low-price strategy. For firm B

In a static game, firms

One reason that it might be difficult for a player to determine his best strategy is that

After analyzing his opponent, a tennis player decides to serve 10% of his serves to the left, 50% of his serves to the right, and 40% of his serves at the body of his opponent. This illustrates a

Communication between players prior to the start of a game that does NOT affect the payoffs is called

Which of the following statements is TRUE about a non-cooperative game?

In Dutch or first-price sealed-bid auctions, participants will bid less than their highest valuation.

Rock-paper-scissors (Roshambo)is an example of a ________ game.

-The above figure shows the payoff to two airlines, A and B, of serving a particular route. If the two airlines must decide simultaneously, which one of the following statements is TRUE?

Which of the following is a simultaneous decision game?

A Nash bargaining solution

If each player in a game uses a strategy that results in a Nash equilibrium outcome, the players are most likely to say

In a first-price sealed-bid auction, the winner pays

-The above figure shows the payoff to two airlines, A and B, of serving a particular route. If the two airlines must decide simultaneously, what will happen if the government offers a $30 subsidy to airlines that serve this route?

A game includes

Not all games with two or more Nash equilibria can be solved with pre-play communication because

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters