Question 1

Games:

Accepted Answer

A) only have one possible stable outcome. 
B) may have noncooperative equilibriums that are positive-positive outcomes. 
C) can only reach equilibrium if there is a dominant strategy present. 
D) None of these are correct. 
A) only have one possible stable outcome. 
B) may have noncooperative equilibriums that are positive-positive outcomes. 
C) can only reach equilibrium if there is a dominant strategy present. 
D) None of these are correct.

Question 2

Which of the following statements about the tit-for-tat strategy in repeated games is true?

Accepted Answer

A) A player takes the same action that an opponent did in the preceding round. 
B) Both players explicitly agree to compete in the first round; if one player cooperates, the other will defect. 
C) This type of strategy is not effective in repeated play of prisoner's dilemma-type games. 
D) All of these statements are true. 
A) A player takes the same action that an opponent did in the preceding round. 
B) Both players explicitly agree to compete in the first round; if one player cooperates, the other will defect. 
C) This type of strategy is not effective in repeated play of prisoner's dilemma-type games. 
D) All of these statements are true.

Question 3

Which of the following statements about the use of a commitment strategy is true?

Accepted Answer

A) It can alter the payoffs in a simultaneous game, but not in a sequential game. 
B) It can alter payoffs in a sequential game, but not in a simultaneous game. 
C) It has little impact on payoffs in both simultaneous and sequential games. 
D) It can alter the payoffs in both simultaneous and sequential games. 
A) It can alter the payoffs in a simultaneous game, but not in a sequential game. 
B) It can alter payoffs in a sequential game, but not in a simultaneous game. 
C) It has little impact on payoffs in both simultaneous and sequential games. 
D) It can alter the payoffs in both simultaneous and sequential games.

Question 4

Behaving strategically:

Accepted Answer

A) means recognizing that the actions of others will affect the trade-offs you face and acting accordingly. 
B) is an essential part of game theory. 
C) involves rational decision-making. 
D) All of these statements are true. 
A) means recognizing that the actions of others will affect the trade-offs you face and acting accordingly. 
B) is an essential part of game theory. 
C) involves rational decision-making. 
D) All of these statements are true.

Question 5

The figure shown portrays a game using a:

Accepted Answer

A) decision tree. 
B) decision matrix. 
C) flowchart. 
D) graph. 
A) decision tree. 
B) decision matrix. 
C) flowchart. 
D) graph.

Question 6

In a game of bargaining, the player who is willing to _______ has more bargaining power and thus receives a _______ payoff.

Accepted Answer

A) be cooperative; worse 
B) hold out longer; worse 
C) hold out longer; better 
D) make the first move; better 
A) be cooperative; worse 
B) hold out longer; worse 
C) hold out longer; better 
D) make the first move; better

Question 7

The figure shown represents the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.The game in the figure is a version of:

Accepted Answer

A) the prisoners' dilemma. 
B) the first-mover advantage. 
C) a sequential game. 
D) a repeated game. 
A) the prisoners' dilemma. 
B) the first-mover advantage. 
C) a sequential game. 
D) a repeated game.

Question 8

In the prisoner's dilemma, players:

Accepted Answer

A) will always choose to cooperate if they can communicate in advance. 
B) may or may not choose to cooperate, even if they can communicate in advance. 
C) will always choose to cooperate, with or without advance communication. 
D) will only choose to cooperate if they are honest and trustworthy. 
A) will always choose to cooperate if they can communicate in advance. 
B) may or may not choose to cooperate, even if they can communicate in advance. 
C) will always choose to cooperate, with or without advance communication. 
D) will only choose to cooperate if they are honest and trustworthy.

Question 9

Payoffs are:

Accepted Answer

A) the rewards that come from particular actions. 
B) always monetary. 
C) things that are only enjoyed by the winner. 
D) bribes made to gain some advantage unfairly during a game. 
A) the rewards that come from particular actions. 
B) always monetary. 
C) things that are only enjoyed by the winner. 
D) bribes made to gain some advantage unfairly during a game.

Question 10

In sequential games, an especially important part of strategic behavior is:

Accepted Answer

A) using the final-mover advantage. 
B) analyzing a problem in reverse. 
C) attempting to minimize the other players' payoffs. 
D) making threats. 
A) using the final-mover advantage. 
B) analyzing a problem in reverse. 
C) attempting to minimize the other players' payoffs. 
D) making threats.

Question 11

The figure shown represents the choices and payoffs (company profits)of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to compete at these prices. The Rock Shop is trying to decide whether or not it should enter the market.According to the figure, if The Rock Shop enters the market, MiiTunes will:

Accepted Answer

A) charge high prices. 
B) charge low prices. 
C) leave the market. 
D) threaten to charge low prices. 
A) charge high prices. 
B) charge low prices. 
C) leave the market. 
D) threaten to charge low prices.

Question 12

In game theory, _______ would be considered a payoff.

Accepted Answer

A) being the first mover in a game 
B) sharing information only with a select few 
C) monetary gains made by a player 
D) giving an advantage to only one player 
A) being the first mover in a game 
B) sharing information only with a select few 
C) monetary gains made by a player 
D) giving an advantage to only one player

Question 13

The figure shown represents the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.Assume that Joe and Sarah, in addition to working together on the school project, are also dating. Joe is madly in love with Sarah, who is an excellent student. Sarah tells Joe that she will break up with him if he does not put forth high effort on this project. This future punishment by Sarah is an example of:

Accepted Answer

A) a commitment strategy. 
B) an effort optimization strategy. 
C) an ultimatum. 
D) a bargaining strategy. 
A) a commitment strategy. 
B) an effort optimization strategy. 
C) an ultimatum. 
D) a bargaining strategy.

Question 14

Which of the following statements is true?

Accepted Answer

A) Games with a negative-negative outcome must have a noncooperative equilibrium. 
B) A negative-negative outcome is not necessarily the best one for the players involved. 
C) When players act in their own self-interest, a negative-negative outcome results. 
D) All of these statements are true. 
A) Games with a negative-negative outcome must have a noncooperative equilibrium. 
B) A negative-negative outcome is not necessarily the best one for the players involved. 
C) When players act in their own self-interest, a negative-negative outcome results. 
D) All of these statements are true.

Question 15

In a prisoners' dilemma,

Accepted Answer

A) the ideal outcome could be reached if communication between players was allowed. 
B) the outcome is less than ideal for at least one player. 
C) the ideal outcome could be reached if players behaved rationally. 
D) the outcome is less than ideal for all players. 
A) the ideal outcome could be reached if communication between players was allowed. 
B) the outcome is less than ideal for at least one player. 
C) the ideal outcome could be reached if players behaved rationally. 
D) the outcome is less than ideal for all players.

Question 16

The figure shown displays the choices that could be made by two firms in an industry: Tesla and Ford. Both companies are trying to decide whether or not to invest in research and development. Tesla will make a decision first, and then Ford will make a decision after observing Tesla's choice. The payoffs are the profits (in millions)these companies will earn as a result of their choices.If these players act in their own self-interest, then Ford will earn:

Accepted Answer

A) $40 million. 
B) $10 million. 
C) $50 million. 
D) $70 million. 
A) $40 million. 
B) $10 million. 
C) $50 million. 
D) $70 million.

Question 17

The figure shown represents a simultaneous-move game between two classmates working on a project together. Each person must decide whether to work hard on the project or to slack off.   Which of the following statements is true?The Nash Equilibrium in this game is for both Eva and Naomi to work hard.This game is a prisoners' dilemma.Neither player has a dominant strategy.

Accepted Answer

A) II and III only 
B) II only 
C) I and II only 
D) I only 
A) II and III only 
B) II only 
C) I and II only 
D) I only

Question 18

All games involve which of the following?Multiple playersStrategiesPayoffs

Accepted Answer

A) I only 
B) II and III only 
C) I and II only 
D) I, II, and III 
A) I only 
B) II and III only 
C) I and II only 
D) I, II, and III

Question 19

Economists call a game that is played more than once:

Accepted Answer

A) a repeated game. 
B) collusion. 
C) a commitment strategy. 
D) cooperative price play. 
A) a repeated game. 
B) collusion. 
C) a commitment strategy. 
D) cooperative price play.

Question 20

Which of the following is a winning strategy in a game of bargaining?

Accepted Answer

A) First-mover advantage 
B) Patience 
C) Cooperation 
D) Self-interested behavior 
A) First-mover advantage 
B) Patience 
C) Cooperation 
D) Self-interested behavior

Games:

Which of the following statements about the tit-for-tat strategy in repeated games is true?

Which of the following statements about the use of a commitment strategy is true?

Behaving strategically:

The figure shown portrays a game using a:

In a game of bargaining, the player who is willing to _ has more bargaining power and thus receives a _ payoff.

In the prisoner's dilemma, players:

Payoffs are:

In sequential games, an especially important part of strategic behavior is:

In game theory, _______ would be considered a payoff.

Which of the following statements is true?

In a prisoners' dilemma,

All games involve which of the following?Multiple playersStrategiesPayoffs

Economists call a game that is played more than once:

Which of the following is a winning strategy in a game of bargaining?

Economics and Life

Specialization and Exchange

Markets

Elasticity

Efficiency

Government Intervention

Consumer Behavior

Behavioral Economics: a Closer Look at Decision Making

Information

Time and Uncertainty

The Costs of Production

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

The Facts of Production

International Trade

Externalities

Public Goods and Common Resources

Taxation and the Public Budget

Poverty, Inequality, and Discrimination

Political Choices

Public Policy and Choice Architecture

Filters

Exam 9: Game Theory and Strategic Thinking

Games:

Which of the following statements about the tit-for-tat strategy in repeated games is true?

Which of the following statements about the use of a commitment strategy is true?

Behaving strategically:

The figure shown portrays a game using a:

In a game of bargaining, the player who is willing to _______ has more bargaining power and thus receives a _______ payoff.

In the prisoner's dilemma, players:

Payoffs are:

In sequential games, an especially important part of strategic behavior is:

In game theory, _______ would be considered a payoff.

Which of the following statements is true?

In a prisoners' dilemma,

All games involve which of the following?Multiple playersStrategiesPayoffs

Economists call a game that is played more than once:

Which of the following is a winning strategy in a game of bargaining?

Economics and Life

Specialization and Exchange

Markets

Elasticity

Efficiency

Government Intervention

Consumer Behavior

Behavioral Economics: a Closer Look at Decision Making

Information

Time and Uncertainty

The Costs of Production

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

The Facts of Production

International Trade

Externalities

Public Goods and Common Resources

Taxation and the Public Budget

Poverty, Inequality, and Discrimination

Political Choices

Public Policy and Choice Architecture

Filters

In a game of bargaining, the player who is willing to _ has more bargaining power and thus receives a _ payoff.