Question 1

A key to gaining cooperative behavior in a repeated game is:

Accepted Answer

A) it must be repeated indefinitely. 
B) there must be a definitive end to the game. 
C) the players must commit to always acting in their own self-interest. 
D) at least one player must have a dominant strategy. 
A) it must be repeated indefinitely. 
B) there must be a definitive end to the game. 
C) the players must commit to always acting in their own self-interest. 
D) at least one player must have a dominant strategy.

Question 2

In games,strategies are:

Accepted Answer

A) the plans of action that players follow to achieve their goals. 
B) the different sets of actions that players could follow during a game. 
C) the same for everyone to achieve the same goal. 
D) All of these statements are true. 
A) the plans of action that players follow to achieve their goals. 
B) the different sets of actions that players could follow during a game. 
C) the same for everyone to achieve the same goal. 
D) All of these statements are true.

Question 3

Games:

Accepted Answer

A) only have one possible stable outcome. 
B) may have noncooperative equilibriums that are positive-positive outcomes. 
C) must have a dominant strategy present in order to reach an equilibrium. 
D) None of these statements is true. 
A) only have one possible stable outcome. 
B) may have noncooperative equilibriums that are positive-positive outcomes. 
C) must have a dominant strategy present in order to reach an equilibrium. 
D) None of these statements is true.

Question 4

To economists,games are:

Accepted Answer

A) any situation in which players pursue strategies designed to achieve their goals. 
B) a trivial pursuit,and should not be used to analyze the economy or its actors. 
C) a way to simplify and minimize the true importance of situations like war. 
D) All of these statements are true. 
A) any situation in which players pursue strategies designed to achieve their goals. 
B) a trivial pursuit,and should not be used to analyze the economy or its actors. 
C) a way to simplify and minimize the true importance of situations like war. 
D) All of these statements are true.

Question 5

Backward induction involves:

Accepted Answer

A) a process of analyzing a problem in reverse. 
B) thinking forward and working backward. 
C) starting with the last choice and working backward to determine an optimal strategy. 
D) All of these statements are true. 
A) a process of analyzing a problem in reverse. 
B) thinking forward and working backward. 
C) starting with the last choice and working backward to determine an optimal strategy. 
D) All of these statements are true.

Question 6

Collusion:

Accepted Answer

A) occurs only when no dominant strategy is present. 
B) can occur when dominant strategies are present for both players. 
C) is observed,but economists cannot theoretically model it. 
D) is a theoretical concept that is rarely observed. 
A) occurs only when no dominant strategy is present. 
B) can occur when dominant strategies are present for both players. 
C) is observed,but economists cannot theoretically model it. 
D) is a theoretical concept that is rarely observed.

Question 7

A way to summarize the actions and payoffs of a sequential game is to use a:

Accepted Answer

A) decision matrix. 
B) decision tree. 
C) payoff tree. 
D) flowchart. 
A) decision matrix. 
B) decision tree. 
C) payoff tree. 
D) flowchart.

Question 8

A commitment strategy is an agreement in which players agree to:

Accepted Answer

A) submit to a penalty in the future if they defect from a given strategy. 
B) cooperate before the game begins. 
C) cooperate in repeated games until someone defects. 
D) None of these is a definition of a commitment strategy. 
A) submit to a penalty in the future if they defect from a given strategy. 
B) cooperate before the game begins. 
C) cooperate in repeated games until someone defects. 
D) None of these is a definition of a commitment strategy.

Question 9

Cooperative equilibriums:

Accepted Answer

A) are impossible to reach in real life. 
B) never occur unless players act in their own self-interest. 
C) None of these statements is true. 
D) never result in positive-positive outcomes. 
A) are impossible to reach in real life. 
B) never occur unless players act in their own self-interest. 
C) None of these statements is true. 
D) never result in positive-positive outcomes.

Question 10

All games involve which of the following?

Accepted Answer

A) Rules 
B) Strategies 
C) Payoffs 
D) All games involve all of these things. 
A) Rules 
B) Strategies 
C) Payoffs 
D) All games involve all of these things.

Question 11

In the prisoner's dilemma game:

Accepted Answer

A) a negative-negative outcome can be predicted. 
B) a dominant strategy exists for both players. 
C) a noncooperative equilibrium can be predicted. 
D) All of these statements are true. 
A) a negative-negative outcome can be predicted. 
B) a dominant strategy exists for both players. 
C) a noncooperative equilibrium can be predicted. 
D) All of these statements are true.

Question 12

Collusion is when businesses:

Accepted Answer

A) agree to cooperate,and their behavior does not serve public interest. 
B) agree to cooperate,and the U.S.government works hard to encourage this behavior. 
C) have noncooperative outcomes,because they compete outside the public eye. 
D) act in their own self-interest and ignore what the other businesses are doing. 
A) agree to cooperate,and their behavior does not serve public interest. 
B) agree to cooperate,and the U.S.government works hard to encourage this behavior. 
C) have noncooperative outcomes,because they compete outside the public eye. 
D) act in their own self-interest and ignore what the other businesses are doing.

Question 13

For a commitment strategy to work:

Accepted Answer

A) the punishment must be so bad that it outweighs the incentive to defect in the game. 
B) the punishment must be immediately after the game is played. 
C) both players must agree to a punishment. 
D) no player may have a dominant strategy. 
A) the punishment must be so bad that it outweighs the incentive to defect in the game. 
B) the punishment must be immediately after the game is played. 
C) both players must agree to a punishment. 
D) no player may have a dominant strategy.

Question 14

The prisoner's dilemma is a game of strategy:

Accepted Answer

A) in which people make rational choices that lead to a less-than-ideal result for all. 
B) in which people make rational choices that lead to the ideal result for all. 
C) that leads everyone to be as well off as possible without making another worse off. 
D) that leads people to make irrational choices that lead to the ideal result for all. 
A) in which people make rational choices that lead to a less-than-ideal result for all. 
B) in which people make rational choices that lead to the ideal result for all. 
C) that leads everyone to be as well off as possible without making another worse off. 
D) that leads people to make irrational choices that lead to the ideal result for all.

Question 15

In repeated games:

Accepted Answer

A) a cooperative outcome is more likely than in a single game. 
B) a noncooperative outcome is more likely than in a single game. 
C) cooperation never happens. 
D) players always cooperate and enjoy a mutually beneficial equilibrium. 
A) a cooperative outcome is more likely than in a single game. 
B) a noncooperative outcome is more likely than in a single game. 
C) cooperation never happens. 
D) players always cooperate and enjoy a mutually beneficial equilibrium.

Question 16

Games with a noncooperative equilibrium:

Accepted Answer

A) always result in a negative-negative outcome. 
B) always result in a positive-positive outcome. 
C) can result in either a positive-positive or negative-negative outcome. 
D) always result in a positive-negative outcome (zero-sum). 
A) always result in a negative-negative outcome. 
B) always result in a positive-positive outcome. 
C) can result in either a positive-positive or negative-negative outcome. 
D) always result in a positive-negative outcome (zero-sum).

Question 17

Games with a negative-negative outcome:

Accepted Answer

A) must have a noncooperative equilibrium. 
B) are not necessarily the best outcome for the players involved. 
C) result from players acting in their own self-interest. 
D) All of these statements are true. 
A) must have a noncooperative equilibrium. 
B) are not necessarily the best outcome for the players involved. 
C) result from players acting in their own self-interest. 
D) All of these statements are true.

Question 18

A game with a first-mover advantage is one in which:

Accepted Answer

A) the player who chooses first gets a higher payoff than those who follow. 
B) the player who chooses first gets to decide if a repeated game will start with cooperation from the beginning. 
C) the first player to move determines the payoffs for the rest of the game. 
D) None of these statements is true. 
A) the player who chooses first gets a higher payoff than those who follow. 
B) the player who chooses first gets to decide if a repeated game will start with cooperation from the beginning. 
C) the first player to move determines the payoffs for the rest of the game. 
D) None of these statements is true.

Question 19

In games,rules:

Accepted Answer

A) define the actions that are allowed in a game. 
B) need to be loosely adhered to in order to predict an outcome. 
C) define the winners of a game. 
D) outline the wrong choices that could be made in a game. 
A) define the actions that are allowed in a game. 
B) need to be loosely adhered to in order to predict an outcome. 
C) define the winners of a game. 
D) outline the wrong choices that could be made in a game.

Question 20

A dominant strategy is one:

Accepted Answer

A) that is the best one to follow,no matter what strategy other players choose. 
B) in which a player is forced to choose given the rules of the game. 
C) in which a player must choose,even though it does not optimize his outcome. 
D) that is best to follow only for certain strategy choices of rivals. 
A) that is the best one to follow,no matter what strategy other players choose. 
B) in which a player is forced to choose given the rules of the game. 
C) in which a player must choose,even though it does not optimize his outcome. 
D) that is best to follow only for certain strategy choices of rivals.

Exam 9: Game Theory and Strategic Thinking

A key to gaining cooperative behavior in a repeated game is:

In games,strategies are:

Games:

To economists,games are:

Backward induction involves:

Collusion:

A way to summarize the actions and payoffs of a sequential game is to use a:

A commitment strategy is an agreement in which players agree to:

Cooperative equilibriums:

All games involve which of the following?

In the prisoner's dilemma game:

Collusion is when businesses:

For a commitment strategy to work:

The prisoner's dilemma is a game of strategy:

In repeated games:

Games with a noncooperative equilibrium:

Games with a negative-negative outcome:

A game with a first-mover advantage is one in which:

In games,rules:

A dominant strategy is one:

Economics and Life

Specialization and Exchange

Markets

Elasticity

Efficiency

Government Intervention

Consumer Behavior

Behavioral Economics: A Closer Look at Decision Making

Information

Time and Uncertainty

The Costs of Production

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

The Factors of Production

International Trade

Externalities

Public Goods and Common Resources

Taxation and the Public Budget

Poverty, Inequality, and Discrimination

Political Choices

Public Policy and Choice Architecture

Measuring the Wealth of Nations

The Cost of Living

Economic Growth

Unemployment and the Demand for Labor

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Basics of Finance

Money and the Monetary System

Inflation

Financial Crisis

Open-Market Macroeconomics

Development Economics

Filters