Exam 4: Infinitely-Repeated, Static Games

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millions of dollars. If this game is played just once, the Nash equilibrium strategy profile is:

60 -Consider the infinitely-repeated expansion game depicted in Figure 4.3. Suppose that thediscount rate is 75 percent. What is the present value of the stream of payoffs from defection?

-Consider the pricing game depicted in Figure 4.1 in which the payoffs are in millions of dollars. If the discount rate is 20 percent and this game is infinitely repeated, what is the present value of the stream of payoffs from defection?

It is harder to sustain a collusive agreement in an infinitely repeated game if: I. The present value of the stream of payoffs from cooperating is higher. II. The discount rate is lower. III. The present value of violating the agreement is higher. Which of the following is correct?

_____ can make threats credible by making retreat difficult. I. Burning bridges. II. Brinksmanship. III. Contracts. IV. Reputation. Which of the following is correct?

Which of the following can be used to make threats credible by altering payoffs?

-Consider the infinitely-repeated pricing game depicted in Figure 4.4. What is the presentvalue of the stream of payoffs from a no collusion strategy if the discount rate is 10 percent?

-Consider the infinitely-repeated pricing game depicted in Figure 4.4. What is the present value of the stream of payoffs from collusion if the discount rate is 10 percent?

-Consider the infinitely-repeated pricing game depicted in Figure 4.4. If the players agree to cooperate, the most likely strategy profile is:

A trigger strategy is:

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millions of dollars. Below what discount rate will cooperation become unstable?

Loss of reputation and the use of contracts make threats, promises or commitments credible by:

60 -Consider the infinitely-repeated expansion game depicted in Figure 4.3. At what discount rate is a firm indifferent between cooperating and defecting?

-Consider the infinitely-repeated pricing game depicted in Figure 4.4. What is the present value of the stream of payoffs from defection if the discount rate is 10 percent and the rival adopts his or her most likely trigger strategy?

60 -Consider the infinitely-repeated expansion game depicted in Figure 4.3. Suppose that the discount rate is 75 percent. What is the present value of the stream of payoffs from cooperation?

Which of the following affects the ability of firms to form collusive agreements in an infinitely-repeated price-setting game?

-Consider the pricing game depicted in Figure 4.4. If this game is played just once, the focal-point strategy profile is most likely:

60 -Consider the expansion game depicted in Figure 4.3. If this game is played just once, the Nash equilibrium strategy profile is:

A trigger strategy that involves the most punitive response when a rival defects from a collusive agreement is called a:

60 -Consider the infinitely-repeated expansion game depicted in Figure 4.3. Suppose that the discount rate is 75 percent. What is the present value of the stream of payoffs from a no collusion strategy?