Question 1

-In the above figure,the Nash product is

Accepted Answer

A)  20. 
B)  40. 
C)  100. 
D)  400. 
A)  20. 
B)  40. 
C)  100. 
D)  400. C

Question 2

A dominant strategy

Accepted Answer

A)  maximizes the joint profit of the players in the game. 
B)  is the player's best response to all possible strategies of the other player. 
C)  cannot exist when there is a Nash equilibrium. 
D)  only exists when the game is limited to two players. 
A)  maximizes the joint profit of the players in the game. 
B)  is the player's best response to all possible strategies of the other player. 
C)  cannot exist when there is a Nash equilibrium. 
D)  only exists when the game is limited to two players. B

Question 3

If neither firm has a dominant strategy,a Nash equilibrium cannot exist.

Accepted Answer

A) True 
 B)False  False

Question 4

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,and the government imposes a $20 per firm tax on firms that service this route,which of the following maximizes the firms' joint profits?

Accepted Answer

A)  Neither firm services the route. 
B)  Firm A offers firm B $20 to not enter. 
C)  Both firms will service this route. 
D)  Firm B offers firm A $30 to not enter. 
A)  Neither firm services the route. 
B)  Firm A offers firm B $20 to not enter. 
C)  Both firms will service this route. 
D)  Firm B offers firm A $30 to not enter.

Question 5

A sale in which property or a service is sold to the highest bidder is called a(n)

Accepted Answer

A)  auction. 
B)  bidder sale. 
C)  competitive market. 
D)  austrian bundle. 
A)  auction. 
B)  bidder sale. 
C)  competitive market. 
D)  austrian bundle.

Question 6

In a sealed-bid,second-price auction,you should bid

Accepted Answer

A)  your estimate of what others value the good at. 
B)  one dollar more than your estimate of what the second-highest bid will be. 
C)  your highest value. 
D)  the common value of the good. 
A)  your estimate of what others value the good at. 
B)  one dollar more than your estimate of what the second-highest bid will be. 
C)  your highest value. 
D)  the common value of the good.

Question 7

A disagreement point is

Accepted Answer

A)  an item of contention between the two bargaining players. 
B)  a way of keeping score in a negotiation. 
C)  the point in a negotiation where the players cannot reach an agreement. 
D)  the outcome that occurs if there is no agreement in a bargain. 
A)  an item of contention between the two bargaining players. 
B)  a way of keeping score in a negotiation. 
C)  the point in a negotiation where the players cannot reach an agreement. 
D)  the outcome that occurs if there is no agreement in a bargain.

Question 8

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

Accepted Answer

A)  Firm A has a dominant strategy. 
B)  Firm B has a dominant strategy. 
C)  Neither firm entering is a Nash equilibrium. 
D)  The outcome of the game is unpredictable. 
A)  Firm A has a dominant strategy. 
B)  Firm B has a dominant strategy. 
C)  Neither firm entering is a Nash equilibrium. 
D)  The outcome of the game is unpredictable.

Question 9

In a bargaining game,players

Accepted Answer

A)  are forced to negotiate, as in a mediation. 
B)  voluntarily negotiate. 
C)  are engaging in illegal activity. 
D)  Both B and C 
A)  are forced to negotiate, as in a mediation. 
B)  voluntarily negotiate. 
C)  are engaging in illegal activity. 
D)  Both B and C

Question 10

Explain why it is unwise to bid more than your valuation of the good in a sealed bid second-price auction.

Accepted Answer

Assume you have a valuation of the good

Question 11

In a bargaining solution,a player's net surplus is

Accepted Answer

A)  the amount of total surplus minus any deadweight loss. 
B)  the difference between what the player receives in the final bargain minus what she would have gotten from the disagreement point. 
C)  the amount of consumer surplus she receives minus any deadweight loss. 
D)  always maximized. 
A)  the amount of total surplus minus any deadweight loss. 
B)  the difference between what the player receives in the final bargain minus what she would have gotten from the disagreement point. 
C)  the amount of consumer surplus she receives minus any deadweight loss. 
D)  always maximized.

Question 12

-The above figure shows a payoff matrix for two firms,A and B,that must choose between selling basic computers or advanced computers.How many Nash equilibria are there?

Accepted Answer

A)  0 
B)  1 
C)  2 
D)  4 
A)  0 
B)  1 
C)  2 
D)  4

Question 13

A strategy is dominant if

Accepted Answer

A)  it yields a greater payoff than any other player receives. 
B)  it yields a payoff at least as large as that from any other strategy, regardless of the actions of other players. 
C)  the player cannot gain by changing strategy, assuming that no other player changes strategy 
D)  it is part of a Nash equilibrium. 
A)  it yields a greater payoff than any other player receives. 
B)  it yields a payoff at least as large as that from any other strategy, regardless of the actions of other players. 
C)  the player cannot gain by changing strategy, assuming that no other player changes strategy 
D)  it is part of a Nash equilibrium.

Question 14

In the example of coordination problems between Google and Motorola Mobility,one method to solve the problems was

Accepted Answer

A)  to undertake a merger or acquisition. 
B)  form a joint venture. 
C)  for one firm to subcontract with the other. 
D)  All of the above. 
A)  to undertake a merger or acquisition. 
B)  form a joint venture. 
C)  for one firm to subcontract with the other. 
D)  All of the above.

Question 15

A dominated strategy

Accepted Answer

A)  exists when one firm is weaker than another. 
B)  only occurs in a mixed strategy scenario. 
C)  is one that is never used by a rational actor. 
D)  is a characteristic of games with multiple Nash equilibria. 
A)  exists when one firm is weaker than another. 
B)  only occurs in a mixed strategy scenario. 
C)  is one that is never used by a rational actor. 
D)  is a characteristic of games with multiple Nash equilibria.

Question 16

In auctions,the winner always pays a price equal to the highest (his)bid.

Accepted Answer

A) True 
 B)False

Question 17

Cheap talk

Accepted Answer

A)  is never credible. 
B)  is illegal. 
C)  generally affects the game's payoffs. 
D)  can be credible when both firms have an incentive to be truthful. 
A)  is never credible. 
B)  is illegal. 
C)  generally affects the game's payoffs. 
D)  can be credible when both firms have an incentive to be truthful.

Question 18

In game theory,a strategy

Accepted Answer

A)  is useless, because firms are subject to bounded rationality. 
B)  is useful in static games, but not in dynamic games. 
C)  defines the specific actions a firm will make. 
D)  determines the payoff matrix of the game. 
A)  is useless, because firms are subject to bounded rationality. 
B)  is useful in static games, but not in dynamic games. 
C)  defines the specific actions a firm will make. 
D)  determines the payoff matrix of the game.

Question 19

In a first-price sealed-bid auction,the winner pays

Accepted Answer

A)  its own, highest bid. 
B)  the amount bid by the runner-up. 
C)  the average of the three highest bids. 
D)  the common value. 
A)  its own, highest bid. 
B)  the amount bid by the runner-up. 
C)  the average of the three highest bids. 
D)  the common value.

Question 20

In Dutch or first-price sealed-bid auctions,participants will bid less than their highest valuation.

Accepted Answer

A) True 
 B)False

-In the above figure,the Nash product is

A dominant strategy

If neither firm has a dominant strategy,a Nash equilibrium cannot exist.

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,and the government imposes a $20 per firm tax on firms that service this route,which of the following maximizes the firms' joint profits?

A sale in which property or a service is sold to the highest bidder is called a(n)

In a sealed-bid,second-price auction,you should bid

A disagreement point is

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

In a bargaining game,players

Explain why it is unwise to bid more than your valuation of the good in a sealed bid second-price auction.

In a bargaining solution,a player's net surplus is

-The above figure shows a payoff matrix for two firms,A and B,that must choose between selling basic computers or advanced computers.How many Nash equilibria are there?

A strategy is dominant if

In the example of coordination problems between Google and Motorola Mobility,one method to solve the problems was

A dominated strategy

In auctions,the winner always pays a price equal to the highest (his)bid.

Cheap talk

In game theory,a strategy

In a first-price sealed-bid auction,the winner pays

In Dutch or first-price sealed-bid auctions,participants will bid less than their highest valuation.

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 12: Game Theory and Business Strategy

-In the above figure,the Nash product is

A dominant strategy

If neither firm has a dominant strategy,a Nash equilibrium cannot exist.

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,and the government imposes a $20 per firm tax on firms that service this route,which of the following maximizes the firms' joint profits?

A sale in which property or a service is sold to the highest bidder is called a(n)

In a sealed-bid,second-price auction,you should bid

A disagreement point is

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

In a bargaining game,players

Explain why it is unwise to bid more than your valuation of the good in a sealed bid second-price auction.

In a bargaining solution,a player's net surplus is

-The above figure shows a payoff matrix for two firms,A and B,that must choose between selling basic computers or advanced computers.How many Nash equilibria are there?

A strategy is dominant if

In the example of coordination problems between Google and Motorola Mobility,one method to solve the problems was

A dominated strategy

In auctions,the winner always pays a price equal to the highest (his)bid.

Cheap talk

In game theory,a strategy

In a first-price sealed-bid auction,the winner pays

In Dutch or first-price sealed-bid auctions,participants will bid less than their highest valuation.

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters