Question 1

A strategy profile in a noncooperative, static game is a Nash equilibrium when:

Accepted Answer

A)  Each player has only dominated strategies. 
B)  The payoffs from alternative strategy profiles is probabilistic. 
C)  Each player's strategy is the best response to the strategy adopted by rivals. 
D)  Either player has a dominant strategy. 
E)  Answers c and d are correct. 
A)  Each player has only dominated strategies. 
B)  The payoffs from alternative strategy profiles is probabilistic. 
C)  Each player's strategy is the best response to the strategy adopted by rivals. 
D)  Either player has a dominant strategy. 
E)  Answers c and d are correct.

Question 2

-Consider the noncooperative, one-time, static game depicted in Figure 2.13 in which larger payoffs are preferred. If both players adopt a maximin decision rule, the resulting strategy profile for this game is:

Accepted Answer

A)  {A1, B1}. 
B)  {A1, B2}. 
C)  {A2, B1}. 
D)  {A2, B2}. 
A)  {A1, B1}. 
B)  {A1, B2}. 
C)  {A2, B1}. 
D)  {A2, B2}.

Question 3

-Figure 2.21 summarizes a static game involving three oil companies that have purchased leases on land lying above the same crude oil deposit. Each oil company must decide whether to drill a wide or a narrow well. All payoffs are in millions of dollars. Suppose that the U.S. government wishes to encourage the development of narrow drilling technology. It does this by offering each company a $5 million production subsidy to drill narrow wells. The payoff matrix includes this subsidy. If larger payoffs are preferred, the Nash equilibrium strategy profile for this game is:
I. {Wide, Wide, Narrow}.
II. {Narrow, Wide, Wide}.
III. {Narrow, Wide, Narrow}.
IV. {Narrow, Narrow, Wide}.
V. {Wide, Narrow, Narrow}.
Which of the following is correct?

Accepted Answer

A)  I, II, and III only. 
B)  II, III, and IV only. 
C)  I, III, and IV only. 
D)  III, IV and V only. 
E)  This game does not have a Nash equilibrium strategy profile. 
A)  I, II, and III only. 
B)  II, III, and IV only. 
C)  I, III, and IV only. 
D)  III, IV and V only. 
E)  This game does not have a Nash equilibrium strategy profile.

Question 4

-Consider the noncooperative, one-time, static game depicted in Figure 2.11. Fly-by-night Airlines and Going-going-gone Airways are rival air carriers operating in the lucrative northeast corridor. Each air carrier is considering implementing a frequent-flyer program or continuing with their standard fare schedule. If both players adopt a maximin decision rule, what is the resulting strategy profile for this game?

Accepted Answer

A)  {Standard, Standard} 
B)  {Standard, Frequent flyer} 
C)  {Frequent flyer, Standard} 
D)  {Frequent flyer, Frequent flyer} 
A)  {Standard, Standard} 
B)  {Standard, Frequent flyer} 
C)  {Frequent flyer, Standard} 
D)  {Frequent flyer, Frequent flyer}

Question 5

A maximin decision rule selects:

Accepted Answer

A)  The best of two weakly dominant strategies. 
B)  The strategy that results in the best of the worst possible payoffs. 
C)  A secure strategy. 
D)  Both b and c are correct. 
E)  None of the above are correct. 
A)  The best of two weakly dominant strategies. 
B)  The strategy that results in the best of the worst possible payoffs. 
C)  A secure strategy. 
D)  Both b and c are correct. 
E)  None of the above are correct.

Question 6

-Refer to Figure 2.7, which summarizes the payoffs in thousands of dollars to two firms ina duopolistic industry arising from alternative pricing strategies. Assume that this is asimultaneous-move, non-cooperative, one-time game. Which firm has a strictly dominant strategy?

Accepted Answer

A)  Firm A 
B)  Firm B 
C)  Both firms 
D)  Neither firm 
A)  Firm A 
B)  Firm B 
C)  Both firms 
D)  Neither firm

Question 7

A secure strategy is:

Accepted Answer

A)  The best of two dominant strategies. 
B)  The worst of two dominant strategies 
C)  The strategy that results in the best of the worst possible payoffs. 
D)  A maximin strategy. 
E)  Both c and d are correct. 
A)  The best of two dominant strategies. 
B)  The worst of two dominant strategies 
C)  The strategy that results in the best of the worst possible payoffs. 
D)  A maximin strategy. 
E)  Both c and d are correct.

Question 8

When both players in a noncooperative, one-time, static game have strictly dominant strategies, the resulting strategy profile is:

Accepted Answer

A)  A market equilibrium. 
B)  A game-theoretic stasis. 
C)  A strictly-dominant-strategy equilibrium. 
D)  Always a prisoner's dilemma. 
E)  All of the above. 
A)  A market equilibrium. 
B)  A game-theoretic stasis. 
C)  A strictly-dominant-strategy equilibrium. 
D)  Always a prisoner's dilemma. 
E)  All of the above.

Question 9

In the text application "Indiana Jones and the Last Crusade,"Indiana Jones's strictly dominant strategy was to:

Accepted Answer

A)  Drink from the Holy Grail. 
B)  Have Dr. Elsa Schneider drink from the Holy Grail. 
C)  Ask the Grail knight to drink from the Holy Grail. 
D)  Have Professor Henry Jones, Sr. drink from the Holy Grail. 
E)  Have Walter Donovan drink from the Holy Grail. 
A)  Drink from the Holy Grail. 
B)  Have Dr. Elsa Schneider drink from the Holy Grail. 
C)  Ask the Grail knight to drink from the Holy Grail. 
D)  Have Professor Henry Jones, Sr. drink from the Holy Grail. 
E)  Have Walter Donovan drink from the Holy Grail.

Question 10

-Consider the static game depicted in Figure 2.18. Player A has _____ dominated strategy or strategies.

Accepted Answer

A)  0 
B)  1 
C)  2 
D)  3 
A)  0 
B)  1 
C)  2 
D)  3

Question 11

-Suppose that an industry consists of two firms: Magna Corporation and Summa Corporation. Each firm produces an identical product. Magna and Summa are considering whether to expand (None) their production capacity for the next operating period. If the decision is to expand, the two firms must decide whether the expansion should be Moderate or Extensive. The tradeoff confronting each firm is that expansion will result in greater output that will lower the selling price of the product in the market. The normal form of this game is summarized in Figure 2.16. If larger payoffs are preferred, Summa has _____ dominated strategy or strategies.

Accepted Answer

A)  0 
B)  1 
C)  2 
D)  3 
A)  0 
B)  1 
C)  2 
D)  3

Question 12

Suppose that firm A and firm B enter into a collusive agreement. Suppose firm A violate the agreement, which results in firm B deciding never again to cooperate with firm A. This is an example of a:

Accepted Answer

A)  Strictly dominant strategy. 
B)  Trigger strategy. 
C)  Cheating rule. 
D)  Backward iteration. 
E)  Focal-point strategy. 
A)  Strictly dominant strategy. 
B)  Trigger strategy. 
C)  Cheating rule. 
D)  Backward iteration. 
E)  Focal-point strategy.

Question 13

Firm A is considering entering a market in which firm B is a monopolist. Firm B must decide how to respond to this challenge. If firm A decides to enter, firm B can either adopt an aggressive pricing strategy or a passive pricing strategy. If firm B adopts an aggressive pricing strategy, firm A will lose $5 million, although firm B will only earn $1 million. If firm B adopts a passive pricing strategy, firm A will earn $3 million and firm B will earn $7 million. Finally, if firm A decides to stay out of the market, firm B will earn $14 million regardless of its pricing strategy. Firm A:

Accepted Answer

A)  Has a weakly dominant strategy. 
B)  Does not have a dominant strategy. 
C)  Has a strictly dominant strategy. 
D)  Has a iterated weakly dominant strategy. 
E)  None of the above 
A)  Has a weakly dominant strategy. 
B)  Does not have a dominant strategy. 
C)  Has a strictly dominant strategy. 
D)  Has a iterated weakly dominant strategy. 
E)  None of the above

Question 14

-Consider the simultaneous-move game depicted in Figure 2.4. Which team has a dominant strategy?

Accepted Answer

A)  New York Giants 
B)  Baltimore Ravens 
C)  Both teams 
D)  Neither team 
A)  New York Giants 
B)  Baltimore Ravens 
C)  Both teams 
D)  Neither team

Question 15

-Consider the noncooperative, one-time, static game depicted in Figure 2.11. Fly-by-night Airlines and Going-going-gone Airways are rival air carriers operating in the lucrative northeast corridor. Each air carrier is considering implementing a frequent-flyer program or continuing with their standard fare schedule. Which company has a dominant strategy?

Accepted Answer

A)  Fly-by-night 
B)  Going-going-gone 
C)  Both airlines 
D)  Neither airline 
A)  Fly-by-night 
B)  Going-going-gone 
C)  Both airlines 
D)  Neither airline

Question 16

-Refer to Figure 2.1, which represents a noncooperative, one-time, static game. Firm A's secure strategy is:

Accepted Answer

A)  Raise price. 
B)  Don't raise price. 
C)  It's dominant strategy. 
D)  It's dominated strategy. 
E)  Answers b and d are correct. 
A)  Raise price. 
B)  Don't raise price. 
C)  It's dominant strategy. 
D)  It's dominated strategy. 
E)  Answers b and d are correct.

Question 17

-Refer to Figure 2.1, which represents the normal form of a non-cooperative, simultaneous-move, one-time game. If larger payoffs are preferred, _____ has/have a strictly dominant strategy?

Accepted Answer

A)  Firm A 
B)  Firm B 
C)  Both firms 
D)  Neither firm 
A)  Firm A 
B)  Firm B 
C)  Both firms 
D)  Neither firm

Question 18

-Consider the noncooperative, one-time, static game depicted in Figure 2.22. The Nash equilibrium strategy profile(s) for this game is(are):
I. {Robin, Popeye, Bullwinkle}.
II. {Batman, Popeye, Rocky}
III. {Batman, Bluto, Bullwinkle}
IV. {Robin, Bluto, Rocky}
V. {Robin, Popeye, Rocky}
Which of the following is correct?

Accepted Answer

A)  I only. 
B)  II only. 
C)  III only. 
D)  IV only. 
E)  I, II, and III. 
A)  I only. 
B)  II only. 
C)  III only. 
D)  IV only. 
E)  I, II, and III.

Question 19

-Consider the static game depicted in Figure 2.19. P2 has _____ dominated strategy or strategies.

Accepted Answer

A)  0 
B)  1 
C)  2 
D)  3 
A)  0 
B)  1 
C)  2 
D)  3

Question 20

-Refer to Figure 2.7, which summarizes the payoffs in thousands of dollars to two firms in a duopolistic industry arising from alternative pricing strategies. Assume that this is a simultaneous-move, non-cooperative, one-time game. The payoffs for this game are:

Accepted Answer

A)  (300, 350). 
B)  (-100, 425). 
C)  (400, -150). 
D)  (190, 180). 
E)  (400, 425). 
A)  (300, 350). 
B)  (-100, 425). 
C)  (400, -150). 
D)  (190, 180). 
E)  (400, 425).

A strategy profile in a noncooperative, static game is a Nash equilibrium when:

-Consider the noncooperative, one-time, static game depicted in Figure 2.13 in which larger payoffs are preferred. If both players adopt a maximin decision rule, the resulting strategy profile for this game is:

A maximin decision rule selects:

-Refer to Figure 2.7, which summarizes the payoffs in thousands of dollars to two firms ina duopolistic industry arising from alternative pricing strategies. Assume that this is asimultaneous-move, non-cooperative, one-time game. Which firm has a strictly dominant strategy?

A secure strategy is:

When both players in a noncooperative, one-time, static game have strictly dominant strategies, the resulting strategy profile is:

In the text application "Indiana Jones and the Last Crusade,"Indiana Jones's strictly dominant strategy was to:

-Consider the static game depicted in Figure 2.18. Player A has _____ dominated strategy or strategies.

Suppose that firm A and firm B enter into a collusive agreement. Suppose firm A violate the agreement, which results in firm B deciding never again to cooperate with firm A. This is an example of a:

-Consider the simultaneous-move game depicted in Figure 2.4. Which team has a dominant strategy?

-Refer to Figure 2.1, which represents a noncooperative, one-time, static game. Firm A's secure strategy is:

-Refer to Figure 2.1, which represents the normal form of a non-cooperative, simultaneous-move, one-time game. If larger payoffs are preferred, _____ has/have a strictly dominant strategy?

-Consider the static game depicted in Figure 2.19. P2 has _____ dominated strategy or strategies.

-Refer to Figure 2.7, which summarizes the payoffs in thousands of dollars to two firms in a duopolistic industry arising from alternative pricing strategies. Assume that this is a simultaneous-move, non-cooperative, one-time game. The payoffs for this game are:

Introduction to Game Theory

Focal-Point and Evolutionary Equilibria

Infinitely-Repeated, Static Games

Finitely-Repeated, Static Games

Mixing Pure Strategies

Static Games With Continuous Strategies

Imperfect Competition

Perfect Competition and Monopoly

Strategic Trade Policy

Dynamic Games With Complete

Bargaining

Pure Strategies With Uncertain Payoffs

Torts and Contracts

Auctions

Dynamic Games With Incomplete Information

Filters

Exam 2: Noncooperative, One-Time, Static Games

A strategy profile in a noncooperative, static game is a Nash equilibrium when:

-Consider the noncooperative, one-time, static game depicted in Figure 2.13 in which larger payoffs are preferred. If both players adopt a maximin decision rule, the resulting strategy profile for this game is:

A maximin decision rule selects:

-Refer to Figure 2.7, which summarizes the payoffs in thousands of dollars to two firms ina duopolistic industry arising from alternative pricing strategies. Assume that this is asimultaneous-move, non-cooperative, one-time game. Which firm has a strictly dominant strategy?

A secure strategy is:

When both players in a noncooperative, one-time, static game have strictly dominant strategies, the resulting strategy profile is:

In the text application "Indiana Jones and the Last Crusade,"Indiana Jones's strictly dominant strategy was to:

-Consider the static game depicted in Figure 2.18. Player A has _____ dominated strategy or strategies.

Suppose that firm A and firm B enter into a collusive agreement. Suppose firm A violate the agreement, which results in firm B deciding never again to cooperate with firm A. This is an example of a:

-Consider the simultaneous-move game depicted in Figure 2.4. Which team has a dominant strategy?

-Refer to Figure 2.1, which represents a noncooperative, one-time, static game. Firm A's secure strategy is:

-Refer to Figure 2.1, which represents the normal form of a non-cooperative, simultaneous-move, one-time game. If larger payoffs are preferred, _____ has/have a strictly dominant strategy?

-Consider the static game depicted in Figure 2.19. P2 has _____ dominated strategy or strategies.

-Refer to Figure 2.7, which summarizes the payoffs in thousands of dollars to two firms in a duopolistic industry arising from alternative pricing strategies. Assume that this is a simultaneous-move, non-cooperative, one-time game. The payoffs for this game are:

Introduction to Game Theory

Focal-Point and Evolutionary Equilibria

Infinitely-Repeated, Static Games

Finitely-Repeated, Static Games

Mixing Pure Strategies

Static Games With Continuous Strategies

Imperfect Competition

Perfect Competition and Monopoly

Strategic Trade Policy

Dynamic Games With Complete

Bargaining

Pure Strategies With Uncertain Payoffs

Torts and Contracts

Auctions

Dynamic Games With Incomplete Information

Filters