Question 1

Whenever both players have a dominant strategy in a Nash game, that strategy will determine the outcome.

Accepted Answer

A) True 
 B)False  True

Question 2

A Bertrand equilibrium is an example of a Nash equilibrium.

Accepted Answer

A) True 
 B)False  True

Question 3

The prisoners' dilemma shows that in a Nash equilibrium:

Accepted Answer

A) neither player can have a better result than the other. 
B) sometimes players do not reach the optimal outcome. 
C) only an irrational strategy will lead to an outcome worse than the optimal outcome. 
D) each player acting independently will lead to the optimal outcome. 
A) neither player can have a better result than the other. 
B) sometimes players do not reach the optimal outcome. 
C) only an irrational strategy will lead to an outcome worse than the optimal outcome. 
D) each player acting independently will lead to the optimal outcome. B

Question 4

A Cournot equilibrium is an example of a Nash equilibrium.

Accepted Answer

A) True 
 B)False

Question 5

Reference: In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second.  
-Games with structures like Game 9 above have been used to describe:

Accepted Answer

A) bank runs. 
B) collusion in Sumo wrestling. 
C) dominant strategy equilibria. 
D) the decision to hire a lawyer. 
A) bank runs. 
B) collusion in Sumo wrestling. 
C) dominant strategy equilibria. 
D) the decision to hire a lawyer.

Question 6

Player A and Player B are playing a prisoners' dilemma game. If the players play the game repeatedly with each other, the players may play cooperatively.

Accepted Answer

A) True 
 B)False

Question 7

In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second.  
-In Game 6 above,

Accepted Answer

A) Player A has a dominant strategy. 
B) Player B has a dominant strategy. 
C) both players have dominant strategies. 
D) neither player has a dominant strategy. 
A) Player A has a dominant strategy. 
B) Player B has a dominant strategy. 
C) both players have dominant strategies. 
D) neither player has a dominant strategy.

Question 8

The likelihood of a cooperative outcome in a repeated prisoners' dilemma type game decreases when:

Accepted Answer

A) they value payoffs in future periods much less than they value payoffs in the current period. 
B) interactions between the players are frequent. 
C) cheating is easy to detect. 
D) the one-time gain from cheating is small in comparison to the eventual cost of cheating. 
A) they value payoffs in future periods much less than they value payoffs in the current period. 
B) interactions between the players are frequent. 
C) cheating is easy to detect. 
D) the one-time gain from cheating is small in comparison to the eventual cost of cheating.

Question 9

Pure strategy:

Accepted Answer

A) is a specific choice of a strategy from the player's possible strategies in the game, whereas a mixed strategy is a choice between quantity and price optimization. 
B) is a specific choice of a strategy outside of the player's possible strategies in the game, whereas a mixed strategy is a choice among two or more pure strategies according to pre-specified probabilities. 
C) is a specific choice of a strategy outside of the player's possible strategies in the game, whereas a mixed strategy is a choice between quantity and price optimization. 
D) is a specific choice of a strategy from the player's possible strategies in the game, whereas a mixed strategy is a choice among two or more pure strategies according to pre-specified probabilities. 
A) is a specific choice of a strategy from the player's possible strategies in the game, whereas a mixed strategy is a choice between quantity and price optimization. 
B) is a specific choice of a strategy outside of the player's possible strategies in the game, whereas a mixed strategy is a choice among two or more pure strategies according to pre-specified probabilities. 
C) is a specific choice of a strategy outside of the player's possible strategies in the game, whereas a mixed strategy is a choice between quantity and price optimization. 
D) is a specific choice of a strategy from the player's possible strategies in the game, whereas a mixed strategy is a choice among two or more pure strategies according to pre-specified probabilities.

Question 10

In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second.  
-In Game 4 above,

Accepted Answer

A) There is one Nash equilibrium. 
B) There are two Nash equilibria. 
C) There are three Nash equilibria. 
D) There are four Nash equilibria. 
A) There is one Nash equilibrium. 
B) There are two Nash equilibria. 
C) There are three Nash equilibria. 
D) There are four Nash equilibria.

Question 11

Nash games cannot have more than one equilibrium.

Accepted Answer

A) True 
 B)False

Question 12

A dominant strategy:

Accepted Answer

A) is a strong strategy. 
B) guarantees a Nash equilibrium. 
C) is a strategy that is better for a player than any other the player might choose, regardless of the other player's strategy. 
D) depends on the other player's strategy. 
A) is a strong strategy. 
B) guarantees a Nash equilibrium. 
C) is a strategy that is better for a player than any other the player might choose, regardless of the other player's strategy. 
D) depends on the other player's strategy.

Question 13

The Cournot and Bertrand models are examples of "prisoner's dilemma" games.

Accepted Answer

A) True 
 B)False

Question 14

A game can be both Cournot and Nash.

Accepted Answer

A) True 
 B)False

Question 15

In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second.  
-Game 8 shows the payoff matrix in terms of profit (in millions of dollars)for two possible strategies: advertise or do not advertise. Suppose that the two companies can legally make a non-binding agreement to not advertise. Based on the payoff matrix shown above, will the two companies honor such an agreement to not advertise?

Accepted Answer

A) Yes. Both Coke and Pepsi will not advertise. 
B) No. Coke will advertise but Pepsi will not. 
C) No. Pepsi will advertise but Coke will not. 
D) No. Both Coke and Pepsi will advertise. 
A) Yes. Both Coke and Pepsi will not advertise. 
B) No. Coke will advertise but Pepsi will not. 
C) No. Pepsi will advertise but Coke will not. 
D) No. Both Coke and Pepsi will advertise.

Question 16

The concept of backwards induction applies to both simultaneous and sequential games.

Accepted Answer

A) True 
 B)False

Question 17

In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second (36-40).  
-In Game 5 above,

Accepted Answer

A) Player A choosing A1 and Player B choosing B1 is a Nash equilibrium. 
B) Player A choosing A2 and Player B choosing B1 is a Nash equilibrium. 
C) Player A choosing A1 and Player B choosing B2 is a Nash equilibrium. 
D) there are no Nash equilibria in pure strategies. 
A) Player A choosing A1 and Player B choosing B1 is a Nash equilibrium. 
B) Player A choosing A2 and Player B choosing B1 is a Nash equilibrium. 
C) Player A choosing A1 and Player B choosing B2 is a Nash equilibrium. 
D) there are no Nash equilibria in pure strategies.

Question 18

In order to solve a sequential game:

Accepted Answer

A) The game is generally solved from the end of the game tree, finding the optimal decision at each decision point and working back to the beginning. 
B) The game is generally solved from the beginning of the game tree, finding the optimal decision at each decision point and working towards the end. 
C) Only a single player's payoffs are necessary. 
D) Tit-for-tat strategies are particularly helpful. 
A) The game is generally solved from the end of the game tree, finding the optimal decision at each decision point and working back to the beginning. 
B) The game is generally solved from the beginning of the game tree, finding the optimal decision at each decision point and working towards the end. 
C) Only a single player's payoffs are necessary. 
D) Tit-for-tat strategies are particularly helpful.

Question 19

A prisoners' dilemma game illustrates the conflict between:

Accepted Answer

A) law enforcement and criminals. 
B) the judicial system and the police system. 
C) law and order. 
D) self-interest and collective interests. 
A) law enforcement and criminals. 
B) the judicial system and the police system. 
C) law and order. 
D) self-interest and collective interests.

Question 20

Player A has a dominated strategy:

Accepted Answer

A) when Player A has a dominant strategy. 
B) in a game of chicken 
C) when Player A has another strategy that gives a higher payoff regardless of what Player B does. 
D) when there are less than three players per game. 
A) when Player A has a dominant strategy. 
B) in a game of chicken 
C) when Player A has another strategy that gives a higher payoff regardless of what Player B does. 
D) when there are less than three players per game.

Whenever both players have a dominant strategy in a Nash game, that strategy will determine the outcome.

A Bertrand equilibrium is an example of a Nash equilibrium.

The prisoners' dilemma shows that in a Nash equilibrium:

A Cournot equilibrium is an example of a Nash equilibrium.

Reference: In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second. -Games with structures like Game 9 above have been used to describe:

Player A and Player B are playing a prisoners' dilemma game. If the players play the game repeatedly with each other, the players may play cooperatively.

In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second. -In Game 6 above,

The likelihood of a cooperative outcome in a repeated prisoners' dilemma type game decreases when:

Pure strategy:

In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second. -In Game 4 above,

Nash games cannot have more than one equilibrium.

A dominant strategy:

The Cournot and Bertrand models are examples of "prisoner's dilemma" games.

A game can be both Cournot and Nash.

The concept of backwards induction applies to both simultaneous and sequential games.

In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second (36-40). -In Game 5 above,

In order to solve a sequential game:

A prisoners' dilemma game illustrates the conflict between:

Player A has a dominated strategy:

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Preferences and the Concept of Utility

Consumer Choice

The Theory of Demand

Inputs and Production Functions

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets: Applications

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

Filters

Exam 14: Game Theory and Strategic Behavior

Whenever both players have a dominant strategy in a Nash game, that strategy will determine the outcome.

A Bertrand equilibrium is an example of a Nash equilibrium.

The prisoners' dilemma shows that in a Nash equilibrium:

A Cournot equilibrium is an example of a Nash equilibrium.

Reference: In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second. -Games with structures like Game 9 above have been used to describe:

Player A and Player B are playing a prisoners' dilemma game. If the players play the game repeatedly with each other, the players may play cooperatively.

In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second. -In Game 6 above,

The likelihood of a cooperative outcome in a repeated prisoners' dilemma type game decreases when:

Pure strategy:

In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second. -In Game 4 above,

Nash games cannot have more than one equilibrium.

A dominant strategy:

The Cournot and Bertrand models are examples of "prisoner's dilemma" games.

A game can be both Cournot and Nash.

The concept of backwards induction applies to both simultaneous and sequential games.

In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second (36-40). -In Game 5 above,

In order to solve a sequential game:

A prisoners' dilemma game illustrates the conflict between:

Player A has a dominated strategy:

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Preferences and the Concept of Utility

Consumer Choice

The Theory of Demand

Inputs and Production Functions

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets: Applications

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

Filters