Question 1

The game in the figure shown is a version of:

Accepted Answer

A) a sequential game. 
B) a one-time game. 
C) a cooperative game. 
D) an ultimatum. 
A) a sequential game. 
B) a one-time game. 
C) a cooperative game. 
D) an ultimatum.

Question 2

A strategy that is the best one to follow no matter what strategy other players choose is called a:

Accepted Answer

A) golden decision. 
B) no-regrets strategy. 
C) dominant strategy. 
D) zero-sum strategy. 
A) golden decision. 
B) no-regrets strategy. 
C) dominant strategy. 
D) zero-sum strategy.

Question 3

When all players in a game choose the best strategy they can, given the choices of all other players, there is always a:

Accepted Answer

A) Nash equilibrium. 
B) positive-positive outcome. 
C) cooperative equilibrium. 
D) negative-negative outcome. 
A) Nash equilibrium. 
B) positive-positive outcome. 
C) cooperative equilibrium. 
D) negative-negative outcome.

Question 4

A game with a first-mover advantage is one in which:

Accepted Answer

A) the player who chooses first gets a higher payoff than those who follow. 
B) the player who chooses first gets to decide if a repeated game will start with cooperation from the beginning. 
C) the first player to move determines the payoff for the rest of the game. 
D) None of these statements are true. 
A) the player who chooses first gets a higher payoff than those who follow. 
B) the player who chooses first gets to decide if a repeated game will start with cooperation from the beginning. 
C) the first player to move determines the payoff for the rest of the game. 
D) None of these statements are true.

Question 5

One player must make a decision before another player does in a:

Accepted Answer

A) commitment game. 
B) simultaneous game. 
C) sequential game. 
D) prisoners' dilemma. 
A) commitment game. 
B) simultaneous game. 
C) sequential game. 
D) prisoners' dilemma.

Question 6

If a player is following a tit-for-tat strategy in a repeated game and an opponent makes a cooperative move, the player will:

Accepted Answer

A) collude. 
B) make a cooperative move in the next round. 
C) price compete. 
D) defect. 
A) collude. 
B) make a cooperative move in the next round. 
C) price compete. 
D) defect.

Question 7

Reaching a positive-positive outcome through a commitment strategy:

Accepted Answer

A) will benefit the players but can never serve public interest. 
B) may not always benefit the players. 
C) can benefit everyone. 
D) will always benefit everyone. 
A) will benefit the players but can never serve public interest. 
B) may not always benefit the players. 
C) can benefit everyone. 
D) will always benefit everyone.

Question 8

The figure shown displays the choices that could be made by Verizon and a new firm in the industry. The payoffs are the profits (in millions)these companies will earn as a result of their choices.What will be the outcome of this game?

Accepted Answer

A) The new firm will expand; Verizon will advertise; the new firm will choose high prices. 
B) The new firm will expand; Verizon will advertise; the new firm will choose low prices. 
C) The new firm will expand; Verizon will not advertise; the new firm will choose high prices. 
D) The new firm will not expand. 
A) The new firm will expand; Verizon will advertise; the new firm will choose high prices. 
B) The new firm will expand; Verizon will advertise; the new firm will choose low prices. 
C) The new firm will expand; Verizon will not advertise; the new firm will choose high prices. 
D) The new firm will not expand.

Question 9

If each player in a repeated game responds by imitating the action of an opponent in the previous round, the players are following a:

Accepted Answer

A) repeated cooperation agreement. 
B) collusion plan. 
C) commitment strategy. 
D) tit-for-tat strategy. 
A) repeated cooperation agreement. 
B) collusion plan. 
C) commitment strategy. 
D) tit-for-tat strategy.

Question 10

The figure shown displays the choices that could be made by two coffee shops: Starbucks and Dunkin' Donuts. Both companies are trying to decide whether or not to expand into a new area. The area can only handle one coffee shop's expansion, and the expansion of one shop will cause the other to lose some business. If both coffee shops expand, the market will become saturated and neither will do well. The payoffs for these shops are the additional profits (or losses)they will earn.Starbucks:

Accepted Answer

A) has a dominant strategy to expand. 
B) has a dominant strategy not to expand. 
C) has the first-mover advantage. 
D) should wait to see what Dunkin' Donuts is going to do. 
A) has a dominant strategy to expand. 
B) has a dominant strategy not to expand. 
C) has the first-mover advantage. 
D) should wait to see what Dunkin' Donuts is going to do.

Question 11

Which of the following statements about repeated games is true?

Accepted Answer

A) Players no longer need commitment strategies to reach a mutually beneficial equilibrium. 
B) Players will never reach a mutually beneficial equilibrium. 
C) There are no dominant strategies. 
D) Only negative-negative outcomes are possible. 
A) Players no longer need commitment strategies to reach a mutually beneficial equilibrium. 
B) Players will never reach a mutually beneficial equilibrium. 
C) There are no dominant strategies. 
D) Only negative-negative outcomes are possible.

Question 12

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.If Joe and Sarah act in their own self-interest, what utility will Sarah receive?

Accepted Answer

A) Only Joe 
B) Only Sarah 
C) Neither Sarah nor Joe 
D) Both Sarah and Joe 
A) Only Joe 
B) Only Sarah 
C) Neither Sarah nor Joe 
D) Both Sarah and Joe

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.What payoff can we predict Joe will receive as the outcome of this game?

Accepted Answer

A) 5 
B) 7 
C) 9 
D) 13 
A) 5 
B) 7 
C) 9 
D) 13

Question 14

The figure shown displays the choices that could be made by two firms in an industry: Target and Kohl's. Both companies are trying to decide how much to discount their products. The payoffs are the profits (in millions)these companies will earn as a result of their choices.What will be the outcome of this game?

Accepted Answer

A) Target will offer no discount and Kohl's will offer a discount of 15% off. 
B) Target will offer no discount and Kohl's will offer a discount of 30% off. 
C) Target will offer a discount of 25% off and Kohl's will offer a discount of 20% off. 
D) Target will offer a discount of 25% off and Kohl's will offer a discount of 40% off. 
A) Target will offer no discount and Kohl's will offer a discount of 15% off. 
B) Target will offer no discount and Kohl's will offer a discount of 30% off. 
C) Target will offer a discount of 25% off and Kohl's will offer a discount of 20% off. 
D) Target will offer a discount of 25% off and Kohl's will offer a discount of 40% off.

Question 15

In which type of game does one player make an offer that the other player must then accept or reject?

Accepted Answer

A) Repeated sequential 
B) Prisoners' dilemma 
C) Ultimatum 
D) Negotiation 
A) Repeated sequential 
B) Prisoners' dilemma 
C) Ultimatum 
D) Negotiation

Question 16

Commitment strategies are:

Accepted Answer

A) not needed to reach a mutually beneficial equilibrium in repeated games. 
B) always needed to reach a mutually beneficial equilibrium in one-time games. 
C) needed to reach a mutually beneficial equilibrium in both one-time and repeated games. 
D) not useful in reaching a mutually beneficial equilibrium and don't occur often in reality. 
A) not needed to reach a mutually beneficial equilibrium in repeated games. 
B) always needed to reach a mutually beneficial equilibrium in one-time games. 
C) needed to reach a mutually beneficial equilibrium in both one-time and repeated games. 
D) not useful in reaching a mutually beneficial equilibrium and don't occur often in reality.

Question 17

How often does collusion occur in the current world of business?

Accepted Answer

A) It rarely occurs. 
B) It never occurs; it's just a theory. 
C) It no longer occurs due to government regulations. 
D) It commonly occurs. 
A) It rarely occurs. 
B) It never occurs; it's just a theory. 
C) It no longer occurs due to government regulations. 
D) It commonly occurs.

Question 18

Which of the following statements about games is true?

Accepted Answer

A) They will always have a dominant strategy 
B) They are always zero sum 
C) They will always have several stable outcomes 
D) None of these are true. 
A) They will always have a dominant strategy 
B) They are always zero sum 
C) They will always have several stable outcomes 
D) None of these are true.

Question 19

To economists, a game is:

Accepted Answer

A) any situation involving at least two players in which one player's outcome depends on another player's choices. 
B) a trivial pursuit that should not be used to analyze the economy or its actors. 
C) a way to simplify and eliminate strategic situations, like war between nations. 
D) All of these statements are true. 
A) any situation involving at least two players in which one player's outcome depends on another player's choices. 
B) a trivial pursuit that should not be used to analyze the economy or its actors. 
C) a way to simplify and eliminate strategic situations, like war between nations. 
D) All of these statements are true.

Question 20

In the real world, wage negotiations:

Accepted Answer

A) follow the ultimatum game. 
B) often end with the company enjoying a larger payoff, since it can afford to be more patient. 
C) often end with the workers enjoying a larger payoff, since they are not losing as much in profit as the company. 
D) may have several rounds of offers and counteroffers. 
A) follow the ultimatum game. 
B) often end with the company enjoying a larger payoff, since it can afford to be more patient. 
C) often end with the workers enjoying a larger payoff, since they are not losing as much in profit as the company. 
D) may have several rounds of offers and counteroffers.

The game in the figure shown is a version of:

A strategy that is the best one to follow no matter what strategy other players choose is called a:

When all players in a game choose the best strategy they can, given the choices of all other players, there is always a:

A game with a first-mover advantage is one in which:

One player must make a decision before another player does in a:

If a player is following a tit-for-tat strategy in a repeated game and an opponent makes a cooperative move, the player will:

Reaching a positive-positive outcome through a commitment strategy:

The figure shown displays the choices that could be made by Verizon and a new firm in the industry. The payoffs are the profits (in millions)these companies will earn as a result of their choices.What will be the outcome of this game?

If each player in a repeated game responds by imitating the action of an opponent in the previous round, the players are following a:

Which of the following statements about repeated games is true?

In which type of game does one player make an offer that the other player must then accept or reject?

Commitment strategies are:

How often does collusion occur in the current world of business?

Which of the following statements about games is true?

To economists, a game is:

In the real world, wage negotiations:

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

The game in the figure shown is a version of:

A strategy that is the best one to follow no matter what strategy other players choose is called a:

When all players in a game choose the best strategy they can, given the choices of all other players, there is always a:

A game with a first-mover advantage is one in which:

One player must make a decision before another player does in a:

If a player is following a tit-for-tat strategy in a repeated game and an opponent makes a cooperative move, the player will:

Reaching a positive-positive outcome through a commitment strategy:

The figure shown displays the choices that could be made by Verizon and a new firm in the industry. The payoffs are the profits (in millions)these companies will earn as a result of their choices.What will be the outcome of this game?

If each player in a repeated game responds by imitating the action of an opponent in the previous round, the players are following a:

Which of the following statements about repeated games is true?

In which type of game does one player make an offer that the other player must then accept or reject?

Commitment strategies are:

How often does collusion occur in the current world of business?

Which of the following statements about games is true?

To economists, a game is:

In the real world, wage negotiations:

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