Question 1

-Consider the game depicted in Figure 11.1 in which player A moves first. The payoffs for the subgame perfect equilibrium of this game are:

Accepted Answer

A)  (100, 350). 
B)  (225, 250). 
C)  (150, 275). 
D)  (250, 125). 
E)  (250, 350). 
A)  (100, 350). 
B)  (225, 250). 
C)  (150, 275). 
D)  (250, 125). 
E)  (250, 350).

Question 2

-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 11.5. If larger payoffs are preferred, which firm has a strictly dominant strategy?

Accepted Answer

A)  Magna Corporation. 
B)  Summa Corporation. 
C)  Both companies. 
D)  Neither company. 
E)  Cannot be determined from the information provided. 
A)  Magna Corporation. 
B)  Summa Corporation. 
C)  Both companies. 
D)  Neither company. 
E)  Cannot be determined from the information provided.

Question 3

An extensive-form game summarizes:

Accepted Answer

A)  Players, strategies, discount rates, order of moves, intentions, and payoffs. 
B)  Players, arrangements, situations, and payoffs. 
C)  Players, arrangements, order of moves, and bids. 
D)  Players, situations, strategies, discount rates, and payoffs. 
E)  Players, stages, strategies, order of moves, and payoffs. 
A)  Players, strategies, discount rates, order of moves, intentions, and payoffs. 
B)  Players, arrangements, situations, and payoffs. 
C)  Players, arrangements, order of moves, and bids. 
D)  Players, situations, strategies, discount rates, and payoffs. 
E)  Players, stages, strategies, order of moves, and payoffs.

Question 4

-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 11.5. If larger payoffs are preferred, the Nash equilibrium strategy profile for this game is:

Accepted Answer

A)  {None, None}. 
B)  {Moderate, Moderate}. 
C)  {Extensive, Extensive}. 
D)  {Moderate, Extensive}. 
E)  {None, Moderate}. 
A)  {None, None}. 
B)  {Moderate, Moderate}. 
C)  {Extensive, Extensive}. 
D)  {Moderate, Extensive}. 
E)  {None, Moderate}.

Question 5

-Suppose that the game depicted in Figure 11.7 is modeled as a sequential move game with Player B moving first and the payoffs are (Player A, Player B). The payoffs to both players are:

Accepted Answer

A)  (5, 2). 
B)  (4, 1). 
C)  (4, 4). 
D)  (3, 2). 
E)  None of the above are correct. 
A)  (5, 2). 
B)  (4, 1). 
C)  (4, 4). 
D)  (3, 2). 
E)  None of the above are correct.

Question 6

-Suppose that the game depicted in Figure 11.6 is modeled as a sequential move game in which P2 moves first and the payoffs are (P2, P1). The subgame perfect equilibrium for this game is:

Accepted Answer

A)  {A ? F}. 
B)  {C ? D}. 
C)  {B ? D}. 
D)  {B ? F}. 
E)  {C ? F}. 
A)  {A ? F}. 
B)  {C ? D}. 
C)  {B ? D}. 
D)  {B ? F}. 
E)  {C ? F}.

Question 7

According to the Stackelberg duopoly model, if both firms in the industry face identical demands and identical total production costs, then:

Accepted Answer

A)  The Stackelberg leader will produce more than the Stackelberg follower. 
B)  The Stackelberg follower will produce more than the Stackelberg leader. 
C)  The Stackelberg leader and Stackelberg follower will produce identical output. 
D)  The outcome is identical with that predicted by the Cournot model. 
A)  The Stackelberg leader will produce more than the Stackelberg follower. 
B)  The Stackelberg follower will produce more than the Stackelberg leader. 
C)  The Stackelberg leader and Stackelberg follower will produce identical output. 
D)  The outcome is identical with that predicted by the Cournot model.

-Consider the game depicted in Figure 11.1 in which player A moves first. The payoffs for the subgame perfect equilibrium of this game are:

An extensive-form game summarizes:

-Suppose that the game depicted in Figure 11.7 is modeled as a sequential move game with Player B moving first and the payoffs are (Player A, Player B). The payoffs to both players are:

-Suppose that the game depicted in Figure 11.6 is modeled as a sequential move game in which P2 moves first and the payoffs are (P2, P1). The subgame perfect equilibrium for this game is:

According to the Stackelberg duopoly model, if both firms in the industry face identical demands and identical total production costs, then:

Introduction to Game Theory

Noncooperative, One-Time, Static Games

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

Bargaining

Pure Strategies With Uncertain Payoffs

Torts and Contracts

Auctions

Dynamic Games With Incomplete Information

Filters

Exam 11: Dynamic Games With Complete

-Consider the game depicted in Figure 11.1 in which player A moves first. The payoffs for the subgame perfect equilibrium of this game are:

An extensive-form game summarizes:

-Suppose that the game depicted in Figure 11.7 is modeled as a sequential move game with Player B moving first and the payoffs are (Player A, Player B). The payoffs to both players are:

-Suppose that the game depicted in Figure 11.6 is modeled as a sequential move game in which P2 moves first and the payoffs are (P2, P1). The subgame perfect equilibrium for this game is:

According to the Stackelberg duopoly model, if both firms in the industry face identical demands and identical total production costs, then:

Introduction to Game Theory

Noncooperative, One-Time, Static Games

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

Bargaining

Pure Strategies With Uncertain Payoffs

Torts and Contracts

Auctions

Dynamic Games With Incomplete Information

Filters