Question 1

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 grim strategy?

Accepted Answer

A)  $270 
B)  $330. 
C)  $350. 
D)  $500. 
E)  $550. 
A)  $270 
B)  $330. 
C)  $350. 
D)  $500. 
E)  $550.

Question 2

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

Accepted Answer

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

Question 3

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millionsof dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs by cooperating?

Accepted Answer

A)  $84 million. 
B)  $140 million. 
C)  $168 million. 
D)  $182 million. 
E)  None of the above. 
A)  $84 million. 
B)  $140 million. 
C)  $168 million. 
D)  $182 million. 
E)  None of the above.

Question 4

-Consider the pricing game depicted in Figure 4.1 in which the payoffs are in millions of dollars. If this game is infinitely repeated, below what discount rate will cooperation become unstable?

Accepted Answer

A)  3.33 percent. 
B)  5 percent. 
C)  6.67 percent. 
D)  7.25 percent. 
E)  12.5 percent. 
A)  3.33 percent. 
B)  5 percent. 
C)  6.67 percent. 
D)  7.25 percent. 
E)  12.5 percent.

Question 5

-Consider the pricing game depicted in Figure 4.1 in which the payoffs are in millions of dollars. If this game is played just once, the Nash equilibrium strategy profile is:

Accepted Answer

A)  {Low price, Low price}. 
B)  {Low price, High price}. 
C)  {High price, Low price}. 
D)  {High price, High price}. 
A)  {Low price, Low price}. 
B)  {Low price, High price}. 
C)  {High price, Low price}. 
D)  {High price, High price}.

Question 6

-Consider the infinitely-repeated pricing game depicted in Figure 4.4. Below what discount rate will cooperation become unstable?

Accepted Answer

A)  25 percent. 
B)  50 percent. 
C)  75 percent. 
D)  100 percent. 
E)  None of the above. 
A)  25 percent. 
B)  50 percent. 
C)  75 percent. 
D)  100 percent. 
E)  None of the above.

Question 7

If a finitely-repeated games has a certain end:

Accepted Answer

A)  Each period effectively becomes the final period. 
B)  The game reduces to a series of noncooperative, one-time games. 
C)  There is an end-of-game problem. 
D)  All of the above. 
E)  None of the above. 
A)  Each period effectively becomes the final period. 
B)  The game reduces to a series of noncooperative, one-time games. 
C)  There is an end-of-game problem. 
D)  All of the above. 
E)  None of the above.

Question 8

-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 a no collusion strategy?

Accepted Answer

A)  $4 million. 
B)  $10 million. 
C)  $24 million. 
D)  $36 million. 
E)  None of the above. 
A)  $4 million. 
B)  $10 million. 
C)  $24 million. 
D)  $36 million. 
E)  None of the above.

Question 9

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millionsof dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs from defection?

Accepted Answer

A)  $84 million. 
B)  $140 million. 
C)  $168 million. 
D)  $182 million. 
E)  None of the above. 
A)  $84 million. 
B)  $140 million. 
C)  $168 million. 
D)  $182 million. 
E)  None of the above.

Question 10

In the text application "The Hunt for Red October,"Captain Marco Ramius was criticized by his co-conspirators for his decision to inform Admiral Yuri Padorin of his intention to defect. This strategic move by Ramius is an example of:

Accepted Answer

A)  Burning bridges. 
B)  Brinksmanship. 
C)  Closing doors. 
D)  Bluffing. 
E)  Scorched earth. 
A)  Burning bridges. 
B)  Brinksmanship. 
C)  Closing doors. 
D)  Bluffing. 
E)  Scorched earth.

Question 11

In the text application "Fail-Safe," the strategic policy of mutually assured destruction is an example of:

Accepted Answer

A)  Burning bridges. 
B)  Brinksmanship. 
C)  Closing doors. 
D)  Bluffing. 
E)  Scorched earth. 
A)  Burning bridges. 
B)  Brinksmanship. 
C)  Closing doors. 
D)  Bluffing. 
E)  Scorched earth.

Question 12

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millions of dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs from a no collusion strategy?

Accepted Answer

A)  $84 million. 
B)  $140 million. 
C)  $168 million. 
D)  $182 million. 
E)  None of the above. 
A)  $84 million. 
B)  $140 million. 
C)  $168 million. 
D)  $182 million. 
E)  None of the above.

Question 13

-Consider the infinitely-repeated pricing game depicted in Figure 4.4 in which the players agree to cooperate. If one of the players violates the agreement, a rival's most likely trigger strategy is:

Accepted Answer

A)  Low. 
B)  High. 
C)  Moderate. 
D)  Answers a and b are equally likely. 
E)  Answers a and c are equally likely. 
A)  Low. 
B)  High. 
C)  Moderate. 
D)  Answers a and b are equally likely. 
E)  Answers a and c are equally likely.

Question 14

It is easier 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 higher.
III. The present value of violating the agreement is lower.
Which of the following is correct?

Accepted Answer

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

Question 15

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 lower.
II. The discount rate is higher.
III. The present value of violating the agreement is lower.
Which of the following is correct?

Accepted Answer

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

Question 16

-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 by cooperating?

Accepted Answer

A)  $24 million. 
B)  $34 million. 
C)  $52 million. 
D)  $60 million. 
E)  None of the above. 
A)  $24 million. 
B)  $34 million. 
C)  $52 million. 
D)  $60 million. 
E)  None of the above.

Question 17

Closing doors, burning bridges, brinksmanship, baby steps, teamwork, and the use of agents make threats, promises or commitments credible by:

Accepted Answer

A)  Altering payoffs. 
B)  Making retreat difficult. 
C)  Modifying strategies. 
D)  Including more players. 
E)  Changing the rules of the game. 
A)  Altering payoffs. 
B)  Making retreat difficult. 
C)  Modifying strategies. 
D)  Including more players. 
E)  Changing the rules of the game.

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 grim strategy?

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

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millionsof dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs by cooperating?

-Consider the pricing game depicted in Figure 4.1 in which the payoffs are in millions of dollars. If this game is infinitely repeated, below what discount rate will cooperation become unstable?

-Consider the pricing game depicted in Figure 4.1 in which the payoffs are in millions of dollars. If this game is played just once, the Nash equilibrium strategy profile is:

-Consider the infinitely-repeated pricing game depicted in Figure 4.4. Below what discount rate will cooperation become unstable?

If a finitely-repeated games has a certain end:

-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 a no collusion strategy?

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millionsof dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs from defection?

In the text application "The Hunt for Red October,"Captain Marco Ramius was criticized by his co-conspirators for his decision to inform Admiral Yuri Padorin of his intention to defect. This strategic move by Ramius is an example of:

In the text application "Fail-Safe," the strategic policy of mutually assured destruction is an example of:

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millions of dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs from a no collusion strategy?

-Consider the infinitely-repeated pricing game depicted in Figure 4.4 in which the players agree to cooperate. If one of the players violates the agreement, a rival's most likely trigger strategy is:

It is easier 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 higher. III. The present value of violating the agreement is lower. Which of the following is correct?

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 lower. II. The discount rate is higher. III. The present value of violating the agreement is lower. Which of the following is correct?

-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 by cooperating?

Closing doors, burning bridges, brinksmanship, baby steps, teamwork, and the use of agents make threats, promises or commitments credible by:

Introduction to Game Theory

Noncooperative, One-Time, Static Games

Focal-Point and Evolutionary Equilibria

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 4: Infinitely-Repeated, Static Games

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 grim strategy?

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

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millionsof dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs by cooperating?

-Consider the pricing game depicted in Figure 4.1 in which the payoffs are in millions of dollars. If this game is infinitely repeated, below what discount rate will cooperation become unstable?

-Consider the pricing game depicted in Figure 4.1 in which the payoffs are in millions of dollars. If this game is played just once, the Nash equilibrium strategy profile is:

-Consider the infinitely-repeated pricing game depicted in Figure 4.4. Below what discount rate will cooperation become unstable?

If a finitely-repeated games has a certain end:

-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 a no collusion strategy?

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millionsof dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs from defection?

In the text application "The Hunt for Red October,"Captain Marco Ramius was criticized by his co-conspirators for his decision to inform Admiral Yuri Padorin of his intention to defect. This strategic move by Ramius is an example of:

In the text application "Fail-Safe," the strategic policy of mutually assured destruction is an example of:

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millions of dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs from a no collusion strategy?

-Consider the infinitely-repeated pricing game depicted in Figure 4.4 in which the players agree to cooperate. If one of the players violates the agreement, a rival's most likely trigger strategy is:

It is easier 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 higher. III. The present value of violating the agreement is lower. Which of the following is correct?

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 lower. II. The discount rate is higher. III. The present value of violating the agreement is lower. Which of the following is correct?

-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 by cooperating?

Closing doors, burning bridges, brinksmanship, baby steps, teamwork, and the use of agents make threats, promises or commitments credible by:

Introduction to Game Theory

Noncooperative, One-Time, Static Games

Focal-Point and Evolutionary Equilibria

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