Question 1

In the prisoner's dilemma game:

Accepted Answer

A) neither player has a dominant strategy. 
B) both players have a dominant strategy. 
C) only one player will ever have a dominant strategy. 
D) All of these may be true in a prisoner's dilemma game. 
A) neither player has a dominant strategy. 
B) both players have a dominant strategy. 
C) only one player will ever have a dominant strategy. 
D) All of these may be true in a prisoner's dilemma game.

Question 2

Commitment strategies:

Accepted Answer

A) are not necessary to reach a mutually beneficial equilibrium in repeated games. 
B) are often needed to reach a mutually beneficial equilibrium in single-round games. 
C) usually fail to work. 
D) are not observed in reality. 
A) are not necessary to reach a mutually beneficial equilibrium in repeated games. 
B) are often needed to reach a mutually beneficial equilibrium in single-round games. 
C) usually fail to work. 
D) are not observed in reality.

Question 3

A Nash equilibrium:

Accepted Answer

A) is reached when all players choose the best strategy they can,given the choices of all other players. 
B) is a point in a game when no player has an incentive to change his or her strategy,given what the other players are doing. 
C) is a concept named after the famous game theorist John Nash. 
D) All of these statements are true. 
A) is reached when all players choose the best strategy they can,given the choices of all other players. 
B) is a point in a game when no player has an incentive to change his or her strategy,given what the other players are doing. 
C) is a concept named after the famous game theorist John Nash. 
D) All of these statements are true.

Question 4

Using a decision tree:

Accepted Answer

A) allows a player to see his optimal strategy in a sequential game. 
B) allows a player to see his optimal strategy in a simultaneous game. 
C) can help identify the dominant strategies in a prisoner's dilemma-type game. 
D) can help define a binding commitment strategy. 
A) allows a player to see his optimal strategy in a sequential game. 
B) allows a player to see his optimal strategy in a simultaneous game. 
C) can help identify the dominant strategies in a prisoner's dilemma-type game. 
D) can help define a binding commitment strategy.

Question 5

Cooperation in prisoner's dilemma-type games:

Accepted Answer

A) always benefits the players and the public. 
B) always benefits the players,but does not always benefit the public. 
C) doesn't always benefit the players,but always benefits the public. 
D) doesn't always benefit the players or the public. 
A) always benefits the players and the public. 
B) always benefits the players,but does not always benefit the public. 
C) doesn't always benefit the players,but always benefits the public. 
D) doesn't always benefit the players or the public.

Question 6

All games involve which of the following?

Accepted Answer

A) Rules 
B) A board 
C) Dice 
D) Cards 
A) Rules 
B) A board 
C) Dice 
D) Cards

Question 7

In the prisoner's dilemma:

Accepted Answer

A) a negative-negative outcome can be predicted. 
B) a dominant strategy exists for only one player. 
C) a cooperative 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 only one player. 
C) a cooperative equilibrium can be predicted. 
D) All of these statements are true.

Question 8

An ultimatum game:

Accepted Answer

A) is a one-round sequential game. 
B) is one in which the first-mover has a great advantage. 
C) is when one player makes an offer and the other has to accept or reject. 
D) All of these statements are true. 
A) is a one-round sequential game. 
B) is one in which the first-mover has a great advantage. 
C) is when one player makes an offer and the other has to accept or reject. 
D) All of these statements are true.

Question 9

The study of how people behave strategically under different circumstances is called:

Accepted Answer

A) game theory. 
B) game strategy. 
C) strategy optimization. 
D) strategy theory. 
A) game theory. 
B) game strategy. 
C) strategy optimization. 
D) strategy theory.

Question 10

A dominant strategy:

Accepted Answer

A) is the best one to follow no matter what strategy other players choose. 
B) exists in every game. 
C) is always the same for all players of a game. 
D) All of these statements are true. 
A) is the best one to follow no matter what strategy other players choose. 
B) exists in every game. 
C) is always the same for all players of a game. 
D) All of these statements are true.

Question 11

Which of the following is a subtle way for a company to reassure their competitors that they are committed to a tit-for-tat strategy?

Accepted Answer

A) Price matching guarantees 
B) Setting prices below cost 
C) Collusion 
D) Offering a commitment strategy 
A) Price matching guarantees 
B) Setting prices below cost 
C) Collusion 
D) Offering a commitment strategy

Question 12

Game theory is:

Accepted Answer

A) the study of how people behave strategically under different circumstances. 
B) used to predict the winners of only certain types of strategic games. 
C) used to evaluate the microeconomic choices that involve probabilities of different behaviors. 
D) the study of how people behave when playing a game involving odds,like horse racing. 
A) the study of how people behave strategically under different circumstances. 
B) used to predict the winners of only certain types of strategic games. 
C) used to evaluate the microeconomic choices that involve probabilities of different behaviors. 
D) the study of how people behave when playing a game involving odds,like horse racing.

Question 13

In games,the strategy to reach a particular goal:

Accepted Answer

A) is the same for everyone. 
B) can be different and still achieve the same goal. 
C) should be similar to what others have chosen to reach the same goal. 
D) has begun to be documented by economists. 
A) is the same for everyone. 
B) can be different and still achieve the same goal. 
C) should be similar to what others have chosen to reach the same goal. 
D) has begun to be documented by economists.

Question 14

In the prisoner's dilemma game:

Accepted Answer

A) there is a dominant strategy for both players. 
B) there is a dominant strategy for only one player. 
C) there is no dominant strategy for either player. 
D) there may not be a dominant strategy for either player. 
A) there is a dominant strategy for both players. 
B) there is a dominant strategy for only one player. 
C) there is no dominant strategy for either player. 
D) there may not be a dominant strategy for either player.

Question 15

___________ becomes a winning strategy in a game of bargaining.

Accepted Answer

A) Patience 
B) First-mover advantage 
C) Cooperation 
D) Self-interested behavior 
A) Patience 
B) First-mover advantage 
C) Cooperation 
D) Self-interested behavior

Question 16

Repeated play can change the outcome in sequential games by:

Accepted Answer

A) reducing the first-mover advantage. 
B) removing the incentive to cooperate. 
C) making collusion more probable. 
D) increasing the incentive to defect. 
A) reducing the first-mover advantage. 
B) removing the incentive to cooperate. 
C) making collusion more probable. 
D) increasing the incentive to defect.

Question 17

Games:

Accepted Answer

A) only have one outcome possible. 
B) with noncooperative equilibriums are always negative-negative outcomes. 
C) may have several stable outcomes. 
D) must have a dominant strategy present to reach a stable equilibrium. 
A) only have one outcome possible. 
B) with noncooperative equilibriums are always negative-negative outcomes. 
C) may have several stable outcomes. 
D) must have a dominant strategy present to reach a stable equilibrium.

Question 18

In sequential games,an especially important part of strategic behavior is to:

Accepted Answer

A) "think forward,work backward." 
B) "think backward,work forward." 
C) "think forward,act backward." 
D) "think backward,act forward." 
A) "think forward,work backward." 
B) "think backward,work forward." 
C) "think forward,act backward." 
D) "think backward,act forward."

Question 19

An example of a real-life rule that might constrain our behavior is:

Accepted Answer

A) the cost structure a business faces. 
B) the social norms around what people wear in public. 
C) the laws in place protecting our environment. 
D) All of these are examples of real-life rules. 
A) the cost structure a business faces. 
B) the social norms around what people wear in public. 
C) the laws in place protecting our environment. 
D) All of these are examples of real-life rules.

Question 20

An example of a real-life rule that might constrain people's behavior is:

Accepted Answer

A) minimum wage legislation. 
B) having 24 hours in a day. 
C) the earth's limited supply of oil. 
D) All of these are examples of real-life rules. 
A) minimum wage legislation. 
B) having 24 hours in a day. 
C) the earth's limited supply of oil. 
D) All of these are examples of real-life rules.

Exam 9: Game Theory and Strategic Thinking

In the prisoner's dilemma game:

Commitment strategies:

A Nash equilibrium:

Using a decision tree:

Cooperation in prisoner's dilemma-type games:

All games involve which of the following?

In the prisoner's dilemma:

An ultimatum game:

The study of how people behave strategically under different circumstances is called:

A dominant strategy:

Which of the following is a subtle way for a company to reassure their competitors that they are committed to a tit-for-tat strategy?

Game theory is:

In games,the strategy to reach a particular goal:

In the prisoner's dilemma game:

___________ becomes a winning strategy in a game of bargaining.

Repeated play can change the outcome in sequential games by:

Games:

In sequential games,an especially important part of strategic behavior is to:

An example of a real-life rule that might constrain our behavior is:

An example of a real-life rule that might constrain people's behavior is:

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