Question 1

In repeated games:

Accepted Answer

A)  players no longer need commitment strategies to reach a mutually beneficial equilibrium. 
B)  players will never reach a mutually beneficial equilibrium. 
C)  there are no dominant strategies. 
D)  negative-negative outcomes are the only outcomes possible. 
A)  players no longer need commitment strategies to reach a mutually beneficial equilibrium. 
B)  players will never reach a mutually beneficial equilibrium. 
C)  there are no dominant strategies. 
D)  negative-negative outcomes are the only outcomes possible.

Question 2

Reaching a Nash equilibrium means that:

Accepted Answer

A)  a stable outcome has been reached. 
B)  there is no stable outcome to the game. 
C)  the players will never reach a positive-positive outcome. 
D)  each player has achieved their highest payoff in the game. 
A)  a stable outcome has been reached. 
B)  there is no stable outcome to the game. 
C)  the players will never reach a positive-positive outcome. 
D)  each player has achieved their highest payoff in the game.

Question 3

This figure displays the choices and payoffs (company profits)of two music shops-MiiTunes and The Rock Shop.MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices,in the hopes that a new business will not be able to make a profit at such low prices.The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
If MiiTunes and The Rock Shop are both in the music business and faced with the choices outlined in the figure,we can predict the outcome will be that:

Accepted Answer

A)  MiiTunes charges high prices and The Rock Shop does not enter. 
B)  there is more than one stable outcome to this game. 
C)  there is no stable outcome to this game. 
D)  None of these statements is true. 
A)  MiiTunes charges high prices and The Rock Shop does not enter. 
B)  there is more than one stable outcome to this game. 
C)  there is no stable outcome to this game. 
D)  None of these statements is true.

Question 4

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade.They both will enjoy a higher grade when more effort is put into the project,but they also get pleasure from goofing off and not working on the project.The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
If Joe and Sarah are faced with the game in the figure shown,we can see that:

Accepted Answer

A)  Joe has a dominant strategy, but Sarah does not. 
B)  Sarah has a dominant strategy, but Joe does not. 
C)  neither student has a dominant strategy. 
D)  both students have a dominant strategy. 
A)  Joe has a dominant strategy, but Sarah does not. 
B)  Sarah has a dominant strategy, but Joe does not. 
C)  neither student has a dominant strategy. 
D)  both students have a dominant strategy.

Question 5

Strategies and incentives:

Accepted Answer

A)  work the same whether games are played once or repeated. 
B)  often work quite differently when games are repeated. 
C)  do not change when the game is repeated. 
D)  None of these statements is true. 
A)  work the same whether games are played once or repeated. 
B)  often work quite differently when games are repeated. 
C)  do not change when the game is repeated. 
D)  None of these statements is true.

Question 6

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 7

Payoffs are:

Accepted Answer

A)  the rewards that come from particular actions. 
B)  always monetary. 
C)  things that are only enjoyed by the winner. 
D)  bribes made to gain some advantage unfairly during a game. 
A)  the rewards that come from particular actions. 
B)  always monetary. 
C)  things that are only enjoyed by the winner. 
D)  bribes made to gain some advantage unfairly during a game.

Question 8

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade.They both will enjoy a higher grade when more effort is put into the project,but they also get pleasure from goofing off and not working on the project.The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
The game in the figure shown is a version of:

Accepted Answer

A)  a sequential game. 
B)  a simultaneous game. 
C)  a cooperative game. 
D)  an ultimatum. 
A)  a sequential game. 
B)  a simultaneous game. 
C)  a cooperative game. 
D)  an ultimatum.

Question 9

In a game of bargaining,the player who is willing to:

Accepted Answer

A)  be cooperative has more bargaining power and so receives a worse payoff. 
B)  hold out longer has more bargaining power and so receives a worse payoff. 
C)  hold out longer has more bargaining power and so receives a better payoff. 
D)  make the first move has more bargaining power and so receives a better payoff. 
A)  be cooperative has more bargaining power and so receives a worse payoff. 
B)  hold out longer has more bargaining power and so receives a worse payoff. 
C)  hold out longer has more bargaining power and so receives a better payoff. 
D)  make the first move has more bargaining power and so receives a better payoff.

Question 10

Reaching a positive-positive outcome through a commitment strategy:

Accepted Answer

A)  will only benefit the players and will not serve public interest. 
B)  will not benefit anyone. 
C)  can benefit everyone. 
D)  will always benefit everyone. 
A)  will only benefit the players and will not serve public interest. 
B)  will not benefit anyone. 
C)  can benefit everyone. 
D)  will always benefit everyone.

Question 11

In the real world,it is likely that wage negotiations:

Accepted Answer

A)  drag on for years to see which side is more patient. 
B)  often end with the company enjoying a larger payoff, since they can afford to be more patient. 
C)  often end with the worker's enjoying a larger payoff, since they are not losing as much in profit as the company. 
D)  do not drag on for years. 
A)  drag on for years to see which side is more patient. 
B)  often end with the company enjoying a larger payoff, since they can afford to be more patient. 
C)  often end with the worker's enjoying a larger payoff, since they are not losing as much in profit as the company. 
D)  do not drag on for years.

Question 12

In a game of bargaining,those who _______________ will likely get the highest payoff.

Accepted Answer

A)  are patient 
B)  are cooperative 
C)  have a commitment strategy 
D)  collude 
A)  are patient 
B)  are cooperative 
C)  have a commitment strategy 
D)  collude

Question 13

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

Accepted Answer

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

Question 14

This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts.Both companies are trying to decide whether or not to expand in an area.The area can handle only one of them expanding,and whoever expands will cause the other to lose some business.If they both expand,the market will be saturated,and neither company will do well.The payoffs are the additional profits (or losses)they will earn.
If Starbucks and Dunkin Donuts are faced with the game in the figure shown,we can see that:

Accepted Answer

A)  Starbucks has a dominant strategy, but Dunkin Donuts does not. 
B)  Dunkin Donuts has a dominant strategy, but Starbucks does not. 
C)  neither company has a dominant strategy. 
D)  both companies have a dominant strategy. 
A)  Starbucks has a dominant strategy, but Dunkin Donuts does not. 
B)  Dunkin Donuts has a dominant strategy, but Starbucks does not. 
C)  neither company has a dominant strategy. 
D)  both companies have a dominant strategy.

Question 15

A noncooperative equilibrium is one in which:

Accepted Answer

A)  the participants act independently, pursuing only their individual interests. 
B)  always results in a negative-negative outcome. 
C)  a dominant strategy exists for both players. 
D)  each player ignores the actions of the other players. 
A)  the participants act independently, pursuing only their individual interests. 
B)  always results in a negative-negative outcome. 
C)  a dominant strategy exists for both players. 
D)  each player ignores the actions of the other players.

Question 16

This figure displays the choices and payoffs (company profits)of two music shops-MiiTunes and The Rock Shop.MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices,in the hopes that a new business will not be able to make a profit at such low prices.The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
According to the figure,MiiTunes:

Accepted Answer

A)  has a dominant strategy to charge low prices. 
B)  does not have a dominant strategy. 
C)  has a dominant strategy to charge high prices. 
D)  has more than one dominant strategy. 
A)  has a dominant strategy to charge low prices. 
B)  does not have a dominant strategy. 
C)  has a dominant strategy to charge high prices. 
D)  has more than one dominant strategy.

Question 17

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade.They both will enjoy a higher grade when more effort is put into the project,but they also get pleasure from goofing off and not working on the project.The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
Assume that Joe and Sarah,from the figure shown,are also dating,in addition to working together on the joint school project.Further assume that Joe is madly in love with Sarah,who is an excellent student.Sarah tells Joe that she will break up with him if he does not put forth high effort on this project.This future punishment by Sarah is an example of:

Accepted Answer

A)  a commitment strategy. 
B)  an effort optimization strategy. 
C)  an ultimatum. 
D)  a bargaining strategy. 
A)  a commitment strategy. 
B)  an effort optimization strategy. 
C)  an ultimatum. 
D)  a bargaining strategy.

Question 18

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 stable outcome of a game. 
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 stable outcome of a game. 
D)  All of these statements are true.

Question 19

To economists,games are:

Accepted Answer

A)  just recreational pursuits like chess, Monopoly, or poker. 
B)  any situation in which players pursue strategies designed to achieve their goals. 
C)  situations in which individuals act against their own interest for fun. 
D)  None of these statements are true. 
A)  just recreational pursuits like chess, Monopoly, or poker. 
B)  any situation in which players pursue strategies designed to achieve their goals. 
C)  situations in which individuals act against their own interest for fun. 
D)  None of these statements are true.

Question 20

If one player defects in a repeated game,and his opponent is following a tit-for-tat strategy,we can predict the opponent will:

Accepted Answer

A)  defect in the next round. 
B)  renegotiate. 
C)  cooperate and try to get his opponent to follow. 
D)  collude. 
A)  defect in the next round. 
B)  renegotiate. 
C)  cooperate and try to get his opponent to follow. 
D)  collude.

In repeated games:

Reaching a Nash equilibrium means that:

Strategies and incentives:

Games:

Payoffs are:

In a game of bargaining,the player who is willing to:

Reaching a positive-positive outcome through a commitment strategy:

In the real world,it is likely that wage negotiations:

In a game of bargaining,those who _______________ will likely get the highest payoff.

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

A noncooperative equilibrium is one in which:

A Nash equilibrium:

To economists,games are:

If one player defects in a repeated game,and his opponent is following a tit-for-tat strategy,we can predict the opponent will:

Economics and Life

Specialization and Exchange

Markets

Elasticity

Efficiency

Government Intervention Microeconomics

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

Filters

Exam 9: Game Theory and Strategic Thinking

In repeated games:

Reaching a Nash equilibrium means that:

Strategies and incentives:

Games:

Payoffs are:

In a game of bargaining,the player who is willing to:

Reaching a positive-positive outcome through a commitment strategy:

In the real world,it is likely that wage negotiations:

In a game of bargaining,those who _______________ will likely get the highest payoff.

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

A noncooperative equilibrium is one in which:

A Nash equilibrium:

To economists,games are:

If one player defects in a repeated game,and his opponent is following a tit-for-tat strategy,we can predict the opponent will:

Economics and Life

Specialization and Exchange

Markets

Elasticity

Efficiency

Government Intervention Microeconomics

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

Filters