Question 1

A most-favored-customer clause:

Accepted Answer

A)  is a commitment but not a threat. 
B)  is a threat but not a commitment. 
C)  is both a threat and a commitment. 
D)  is neither a threat nor a commitment. 
E)  could be either a threat or a commitment depending on the terms. 
A)  is a commitment but not a threat. 
B)  is a threat but not a commitment. 
C)  is both a threat and a commitment. 
D)  is neither a threat nor a commitment. 
E)  could be either a threat or a commitment depending on the terms.

Question 2

In a two-player game in which each player has four options,how many outcomes can there be?

Accepted Answer

A)  1. 
B)  4. 
C)  8. 
D)  16. 
E)  64. 
A)  1. 
B)  4. 
C)  8. 
D)  16. 
E)  64.

Question 3

Which pair of strategies would competing firms A and B choose given this payoff matrix?

Accepted Answer

A)  W, Y. 
B)  W, Z. 
C)  X, Y. 
D)  X, Z. 
E)  Either X, Y or W, Z. 
A)  W, Y. 
B)  W, Z. 
C)  X, Y. 
D)  X, Z. 
E)  Either X, Y or W, Z.

Question 4

Useful strategies to deter entry include:

Accepted Answer

A)  increasing advertising. 
B)  increasing prices. 
C)  decreasing capacity. 
D)  increasing capacity. 
E)  a and d 
A)  increasing advertising. 
B)  increasing prices. 
C)  decreasing capacity. 
D)  increasing capacity. 
E)  a and d

Question 5

Strategic foresight is the ability to make decisions today that are rational based on:

Accepted Answer

A)  complete uncertainty about the future. 
B)  our best information about what will happen in the future. 
C)  what we know only about behavior in the past. 
D)  information that we have only about our own behavior in the past. 
E)  incorrect information about the past. 
A)  complete uncertainty about the future. 
B)  our best information about what will happen in the future. 
C)  what we know only about behavior in the past. 
D)  information that we have only about our own behavior in the past. 
E)  incorrect information about the past.

Question 6

Given the following payoff matrix,what will A's profits be?

Accepted Answer

A)  1. 
B)  2. 
C)  3. 
D)  4. 
E)  Unknown until B's action is observed. 
A)  1. 
B)  2. 
C)  3. 
D)  4. 
E)  Unknown until B's action is observed.

Question 7

Refer to the accompanying payoff matrix.Which of the following is a Nash equilibrium?

Accepted Answer

A)  Company A chooses Strategy 1 and Company B chooses Strategy 1. 
B)  Company A chooses Strategy 1 and Company B chooses Strategy 2. 
C)  Company A chooses Strategy 2 and Company B chooses Strategy 2. 
D)  Company A chooses Strategy 2 and Company B chooses Strategy 1. 
E)  None of the above. 
A)  Company A chooses Strategy 1 and Company B chooses Strategy 1. 
B)  Company A chooses Strategy 1 and Company B chooses Strategy 2. 
C)  Company A chooses Strategy 2 and Company B chooses Strategy 2. 
D)  Company A chooses Strategy 2 and Company B chooses Strategy 1. 
E)  None of the above.

Question 8

Game theory is useful for understanding oligopoly behavior because:

Accepted Answer

A)  there are so many firms in an oligopoly that all are price takers. 
B)  firms must differentiate their products if they are to remain in business. 
C)  firms recognize that because there are only a few firms mutual interdependence is important. 
D)  without it firms would not be able to maintain cartel agreements. 
E)  it allows firms to develop greater monopoly power. 
A)  there are so many firms in an oligopoly that all are price takers. 
B)  firms must differentiate their products if they are to remain in business. 
C)  firms recognize that because there are only a few firms mutual interdependence is important. 
D)  without it firms would not be able to maintain cartel agreements. 
E)  it allows firms to develop greater monopoly power.

A most-favored-customer clause:

In a two-player game in which each player has four options,how many outcomes can there be?

Which pair of strategies would competing firms A and B choose given this payoff matrix?

Useful strategies to deter entry include:

Strategic foresight is the ability to make decisions today that are rational based on:

Given the following payoff matrix,what will A's profits be?

Refer to the accompanying payoff matrix.Which of the following is a Nash equilibrium?

Game theory is useful for understanding oligopoly behavior because:

Introduction

Demand Theory

Consumer Behavior and Rational Choice

Estimating Demand Functions

Production Theory

The Analysis of Costs

Perfect Competition

Monopoly and Monopolistic Competition

Managerial Use of Price Discrimination

Bundling and Intrafirm Pricing

Oligopoly

Auctions

Risk Analysis

Principalagent Issues and Managerial Compensation

Adverse Selection

Government and Business

Optimization Techniques

Appendix Problems

Filters

Exam 12: Game Theory

A most-favored-customer clause:

In a two-player game in which each player has four options,how many outcomes can there be?

Which pair of strategies would competing firms A and B choose given this payoff matrix?

Useful strategies to deter entry include:

Strategic foresight is the ability to make decisions today that are rational based on:

Given the following payoff matrix,what will A's profits be?

Refer to the accompanying payoff matrix.Which of the following is a Nash equilibrium?

Game theory is useful for understanding oligopoly behavior because:

Introduction

Demand Theory

Consumer Behavior and Rational Choice

Estimating Demand Functions

Production Theory

The Analysis of Costs

Perfect Competition

Monopoly and Monopolistic Competition

Managerial Use of Price Discrimination

Bundling and Intrafirm Pricing

Oligopoly

Auctions

Risk Analysis

Principalagent Issues and Managerial Compensation

Adverse Selection

Government and Business

Optimization Techniques

Appendix Problems

Filters