Question 1

-The above figure shows the payoff matrix facing an incumbent firm. Assuming a fixed cost of entry, will the incumbent deter entry? Why?

Accepted Answer

It will deter entry.

Question 2

What is the counter-intuitive solution to a mixed strategy?

Accepted Answer

A) Player A makes Player B indifferent between its strategy choices. 
B) Player A makes itself indifferent between its strategy choices. 
C) Player A changes the rules of the game. 
D) There are no mixed strategies in most games. 
A) Player A makes Player B indifferent between its strategy choices. 
B) Player A makes itself indifferent between its strategy choices. 
C) Player A changes the rules of the game. 
D) There are no mixed strategies in most games.

Question 3

A firm producing a relatively large quantity before any rivals have entered the market, is an example of first-mover advantage.

Accepted Answer

A) True 
 B)False

Question 4

Laboratory experiments of the ultimatum games revealed that

Accepted Answer

A) participants' actions were always part of a Nash equilibrium. 
B) participants always split the money equally. 
C) the first mover always kept the smaller share. 
D) the first mover always kept the largest share. 
A) participants' actions were always part of a Nash equilibrium. 
B) participants always split the money equally. 
C) the first mover always kept the smaller share. 
D) the first mover always kept the largest share.

Question 5

The term prisoners' dilemma refers to a game in which

Accepted Answer

A) there are no Nash equilibria. 
B) there are no dominant strategies. 
C) the payoff from playing the dominant strategy is the same for each player. 
D) the payoff from playing the dominant strategy is not the highest payoff possible. 
A) there are no Nash equilibria. 
B) there are no dominant strategies. 
C) the payoff from playing the dominant strategy is the same for each player. 
D) the payoff from playing the dominant strategy is not the highest payoff possible.

Question 6

If a strategy is a best response, then

Accepted Answer

A) it will never be played. 
B) it will never be part of a Nash equilibrium. 
C) A and B are correct. 
D) it could be part of a Nash equilibrium. 
A) it will never be played. 
B) it will never be part of a Nash equilibrium. 
C) A and B are correct. 
D) it could be part of a Nash equilibrium.

Question 7

The individual with the highest valuation of the good will win in which of the following auctions?

Accepted Answer

A) English Auction 
B) Dutch Auction 
C) Sealed Bid Auction 
D) All of the above. 
A) English Auction 
B) Dutch Auction 
C) Sealed Bid Auction 
D) All of the above.

Question 8

Assume an industry, currently dominated by one firm, experiences a large decline in fixed costs. This will

Accepted Answer

A) make entry of other firms more likely. 
B) make entry of other firms less likely. 
C) serve as higher barrier to entry. 
D) induce the incumbent firm to exit the industry. 
A) make entry of other firms more likely. 
B) make entry of other firms less likely. 
C) serve as higher barrier to entry. 
D) induce the incumbent firm to exit the industry.

Question 9

-The above figure shows the payoff to two computer manufacturers, A and B, deciding the type of computer to be released in a foreign country. If firm A chooses its strategy first, then

Accepted Answer

A) both firms will release the basic model. 
B) both firms will release the advanced model. 
C) firm A will release the advanced model, and firm B will release the basic model. 
D) firm A will release the basic model, and firm B will release the advanced model. 
A) both firms will release the basic model. 
B) both firms will release the advanced model. 
C) firm A will release the advanced model, and firm B will release the basic model. 
D) firm A will release the basic model, and firm B will release the advanced model.

-The above figure shows the payoff matrix facing an incumbent firm. Assuming a fixed cost of entry, will the incumbent deter entry? Why?

What is the counter-intuitive solution to a mixed strategy?

A firm producing a relatively large quantity before any rivals have entered the market, is an example of first-mover advantage.

Laboratory experiments of the ultimatum games revealed that

The term prisoners' dilemma refers to a game in which

If a strategy is a best response, then

The individual with the highest valuation of the good will win in which of the following auctions?

Assume an industry, currently dominated by one firm, experiences a large decline in fixed costs. This will

-The above figure shows the payoff to two computer manufacturers, A and B, deciding the type of computer to be released in a foreign country. If firm A chooses its strategy first, then

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 14: Game Theory

-The above figure shows the payoff matrix facing an incumbent firm. Assuming a fixed cost of entry, will the incumbent deter entry? Why?

What is the counter-intuitive solution to a mixed strategy?

A firm producing a relatively large quantity before any rivals have entered the market, is an example of first-mover advantage.

Laboratory experiments of the ultimatum games revealed that

The term prisoners' dilemma refers to a game in which

If a strategy is a best response, then

The individual with the highest valuation of the good will win in which of the following auctions?

Assume an industry, currently dominated by one firm, experiences a large decline in fixed costs. This will

-The above figure shows the payoff to two computer manufacturers, A and B, deciding the type of computer to be released in a foreign country. If firm A chooses its strategy first, then

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters