Exam 11: Game Theory and the Tools of Strategic Business Analysis

A state in which no player will wish to change his or her behavior given the behavior of the other players is known as equilibrium.

The only situation in which a mixed strategy equilibrium arises is one where the mixed strategies chosen leave both players indifferent between the payoffs they expect to receive from their

The sets that indicate what a player knows when it is the player's turn to make a move in a game tree are called information sets.

A set of strategies that constitute a Nash equilibrium, where the actions prescribed by these strategies for the players once they reach any subgame constitute a Nash equilibrium for that subgame is called a(n)

The remaining portion of the game tree at a given node of the larger game is known as backward induction.

Noncooperative games ____________ possibility of communication or binding commitments.

A game in which, when any player makes a move, the player knows all the prior choices made by all the other players is called a game of

A dominated strategy is a strategy that is dominated by another strategy.

A threat in a strategic game that is not believable or would not be carried out if called upon is known as a(n)

A game in which the players have a common interest in reaching an equilibrium yet, if there are multiple equilibria, their preferences may differ as to which is the best, is called a

Extensive form is a

What must the rules of a game of strategy specify?

A Nash equilibrium is a set of strategies, one for each player, in which _______________________ to change behavior given the behavior of the opponents.

Explain how the traditional view of rationality and equity applies to game theory.

A trigger strategy is a type of strategy in an infinite horizon repeated game where one deviation triggers an infinite punishment; also known as a grim strategy.

A zero-sum game is a game in which the gain of one player equals the loss of the other player.

A game of strategy is a multiperson decision problem in which an abstract set of rules constrains the behavior of players and defines outcomes on the basis of the actions taken by the players.

Strategy A dominates strategy B if it gives a higher payoff than B no matter what the opposing players do.

Rational players should _______________ use a dominated strategy.

A mixed strategy equilibrium is where players use