Question 1

When a prisoners' dilemma game is repeated a finite number of times (T)

Accepted Answer

A)  cooperation unravels during the first round of the game, resulting in the static game Nash equilibrium. 
B)  cooperation continues until the T-2 round, where the players will switch to a non-cooperative Nash equilibrium. 
C)  firms cooperate and achieve the collusive Nash equilibrium for all rounds. 
D)  None of the above. 
A)  cooperation unravels during the first round of the game, resulting in the static game Nash equilibrium. 
B)  cooperation continues until the T-2 round, where the players will switch to a non-cooperative Nash equilibrium. 
C)  firms cooperate and achieve the collusive Nash equilibrium for all rounds. 
D)  None of the above.

Question 2

When there's uncertainty as to the length of a game

Accepted Answer

A)  cooperation still does not occur, because cooperation unravels at the beginning of the game. 
B)  cooperation can potentially occur if trigger strategies are adopted. 
C)  firms will cooperate because they treat the game as one that is infinitely repeated. 
D)  firms will randomly pick among the Nash equilibria. 
A)  cooperation still does not occur, because cooperation unravels at the beginning of the game. 
B)  cooperation can potentially occur if trigger strategies are adopted. 
C)  firms will cooperate because they treat the game as one that is infinitely repeated. 
D)  firms will randomly pick among the Nash equilibria.

Question 3

An incumbent's threat to retaliate after a potential competitor enters the market will be taken seriously by potential competitors if

Accepted Answer

A)  the incumbent can still earn a profit after carrying out the threat. 
B)  the incumbent earns greater profit carrying out the threat than by accommodating entry. 
C)  the potential entrant cannot earn a profit if the threat is carried out. 
D)  the potential entrant's profit exceeds the incumbent's if the threat is carried out. 
A)  the incumbent can still earn a profit after carrying out the threat. 
B)  the incumbent earns greater profit carrying out the threat than by accommodating entry. 
C)  the potential entrant cannot earn a profit if the threat is carried out. 
D)  the potential entrant's profit exceeds the incumbent's if the threat is carried out.

Question 4

A an example of a game in which a leader moves first,and then the other rivals follow is a ________ game.

Accepted Answer

A)  Stackelberg model 
B)  Cournot model 
C)  finite move 
D)  Master-Slave game 
A)  Stackelberg model 
B)  Cournot model 
C)  finite move 
D)  Master-Slave game

Question 5

If firms execute a strategy that triggers a permanent punishment,the result in an indefinitely repeated game is

Accepted Answer

A)  undefined. 
B)  the non-cooperative Nash equilibrium. 
C)  the collusive Nash equilibrium. 
D)  economically inefficient. 
A)  undefined. 
B)  the non-cooperative Nash equilibrium. 
C)  the collusive Nash equilibrium. 
D)  economically inefficient.

Question 6

One firm previously operated as a monopoly.Now,one potential entrant exists.Consumers would prefer

Accepted Answer

A)  entry, and the firms to split the output equally. 
B)  no entry, and for the incumbent to produce the Stackelberg leader level of output. 
C)  entry, and for the incumbent to produce the Stackelberg leader level of output. 
D)  no entry, and the monopoly to continue. 
A)  entry, and the firms to split the output equally. 
B)  no entry, and for the incumbent to produce the Stackelberg leader level of output. 
C)  entry, and for the incumbent to produce the Stackelberg leader level of output. 
D)  no entry, and the monopoly to continue.

Question 7

An incumbent firm uses limit pricing

Accepted Answer

A)  to set price below a potential rival's marginal cost, thus making entry unprofitable. 
B)  to set one price for a quantity of a good below a certain limit, and a second price for purchases above the limit. 
C)  when it has no other advantages over a potential rival. 
D)  if it is limited in the quantity of inputs it can purchase to produce output. 
A)  to set price below a potential rival's marginal cost, thus making entry unprofitable. 
B)  to set one price for a quantity of a good below a certain limit, and a second price for purchases above the limit. 
C)  when it has no other advantages over a potential rival. 
D)  if it is limited in the quantity of inputs it can purchase to produce output.

Question 8

With regard to preventing entry,if identical firms act simultaneously

Accepted Answer

A)  they cannot credibly threaten each other. 
B)  they will all incur losses. 
C)  only one firm will enter the market. 
D)  none of them will enter the market. 
A)  they cannot credibly threaten each other. 
B)  they will all incur losses. 
C)  only one firm will enter the market. 
D)  none of them will enter the market.

Question 9

Implicit collusion,where players do not have an explicit agreement

Accepted Answer

A)  are strictly prohibited under antitrust laws. 
B)  are not strictly prohibited under antitrust laws. 
C)  results in cheating. 
D)  maximizes total surplus in the market. 
A)  are strictly prohibited under antitrust laws. 
B)  are not strictly prohibited under antitrust laws. 
C)  results in cheating. 
D)  maximizes total surplus in the market.

When a prisoners' dilemma game is repeated a finite number of times (T)

When there's uncertainty as to the length of a game

An incumbent's threat to retaliate after a potential competitor enters the market will be taken seriously by potential competitors if

A an example of a game in which a leader moves first,and then the other rivals follow is a ________ game.

If firms execute a strategy that triggers a permanent punishment,the result in an indefinitely repeated game is

One firm previously operated as a monopoly.Now,one potential entrant exists.Consumers would prefer

An incumbent firm uses limit pricing

With regard to preventing entry,if identical firms act simultaneously

Implicit collusion,where players do not have an explicit agreement

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

Game Theory and Business Strategy

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 13: Strategies Over Time

When a prisoners' dilemma game is repeated a finite number of times (T)

When there's uncertainty as to the length of a game

An incumbent's threat to retaliate after a potential competitor enters the market will be taken seriously by potential competitors if

A an example of a game in which a leader moves first,and then the other rivals follow is a ________ game.

If firms execute a strategy that triggers a permanent punishment,the result in an indefinitely repeated game is

One firm previously operated as a monopoly.Now,one potential entrant exists.Consumers would prefer

An incumbent firm uses limit pricing

With regard to preventing entry,if identical firms act simultaneously

Implicit collusion,where players do not have an explicit agreement

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

Game Theory and Business Strategy

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters