Exam 14: Game Theory

Assume a firm is a monopoly and enjoys $10,000,000 profits per year.The firm lobbies to have a moratorium passed by Congress on new firms in its market for the next 25 years.If there is no discount rate,how much would any firm(s)arguing against the moratorium be willing to spend to block it?

An auction in which the price announced by the auctioneer DESCENDS is called a(n)

A game in economics is defined as

Which of the following is NOT part of solving a game?

Before entering,fixed cost associated with the industry in question are sunk costs for

One interesting feature of a prisoner's dilemma game is that

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

-The above figure shows the payoff matrix facing an incumbent firm and a potential entrant.Assuming a fixed cost of entry,the outcome will be that the incumbent

-The above figure shows the payoff matrix facing an incumbent firm and a potential entrant.What policy could government adopt to prevent entry deterrence by the incumbent?

With regard to preventing entry,if identical firms act simultaneously,

Why is collusion more likely in a repeated game?

-The above figure shows the payoff to two gasoline stations,A and B,deciding to operate in an isolated town.Suppose a $60 fee is required to enter the market.If firm A chooses its strategy first,then

Two identical firms are considering entering a new market that currently has no suppliers.The demand is large enough for both firms to make a positive profit.There are no fixed costs to enter.Explain how a simultaneous decision to enter on the part of the two firms will lead to a different outcome than a sequential entry decision.

In a simultaneous game where both players prefer doing the opposite of what the opponent does,a Nash equilibrium does not exist.

After analyzing his opponent,a tennis player decides to serve 10% of his serves to the left,50% of his serves to the right,and 40% of his serves at the body of his opponent.This illustrates a

Assume a firm lowers price below marginal cost to deter entry.

If an incumbent faces an identical potential entrant with no costs of entry,the incumbent will

A firm producing a relatively large quantity before any rivals have entered the market,is an example of first-mover advantage.

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

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