Exam 14: Game Theory

-The above figure shows a payoff matrix for two firms,A and B,that must choose between a high-price strategy and a low-price strategy.Both firms setting a high price is not a Nash equilibrium because

-The above figure shows a payoff matrix for two firms,A and B,that must choose between selling basic computers or advanced computers.Firm B's dominant strategy

14.3 Sequential Dynamic Games -The above figure shows the payoff to two gasoline stations,A and B,deciding to operate in an isolated town.If firm A chooses its strategy first,then

Which of the following factors affecting decision-making is studied by Behavioral Game Theory?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.What is Firm A's best response if Firm B decides to enter?

The ability to deter entry requires

14.3 Sequential Dynamic Games -The above figure shows the payoff to two gasoline stations,A and B,deciding to operate in an isolated town.Suppose a $30 fee is required to enter the market.If firm A chooses its strategy first,then

In a two-player simultaneous game where neither player has a dominant strategy,

Deterring entry might require a firm to

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

A subgame perfect Nash equilibrium

Why is collusion more likely in a repeated game?

A Nash equilibrium occurs when

Suppose market demand is p = 10 - Q.Firms have a fixed entry cost of 5 and no marginal cost.If firm A is the incumbent,can it deter the entry of its rival,firm B?

A single-period duopoly firm can choose output level A or B.The firm decides it will produce level A regardless of what the other firm produces.This decision may occur because

One way to ensure cooperation in an infinitely repeated simultaneous game is

What can be said about a non-credible threat that is part of a Nash equilibrium in a sequential game?

-The above figure shows the payoff matrix facing an incumbent firm and a potential entrant.The potential entrant cannot earn a profit if the incumbent

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

-The above figure shows the payoffs to two firms deciding to open a gasoline station in an isolated town.If firm A decides first,what will happen? If there is a $60 fee to enter this market,what will happen?