Question 1

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)  provides a player with the highest payoff in the game. 
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)  provides a player with the highest payoff in the game.

Question 2

In games:

Accepted Answer

A)  there is only one strategy associated with each outcome. 
B)  there are several strategies that can achieve a single goal. 
C)  all strategies followed in one particular game should all be similar in order to be successful. 
D)  if one person's strategy is wildly different from those of others, he will typically come in first or last. 
A)  there is only one strategy associated with each outcome. 
B)  there are several strategies that can achieve a single goal. 
C)  all strategies followed in one particular game should all be similar in order to be successful. 
D)  if one person's strategy is wildly different from those of others, he will typically come in first or last.

Question 3

When a strategy is the best one to follow no matter what strategy other players choose,it is called a:

Accepted Answer

A)  golden decision. 
B)  dominated strategy. 
C)  dominant strategy. 
D)  zero-sum strategy. 
A)  golden decision. 
B)  dominated strategy. 
C)  dominant strategy. 
D)  zero-sum strategy.

Question 4

In real life,people's behavior is constrained by:

Accepted Answer

A)  laws of nature. 
B)  legislated rules of society. 
C)  costs of various actions. 
D)  All of these are rules that constrain people's behavior. 
A)  laws of nature. 
B)  legislated rules of society. 
C)  costs of various actions. 
D)  All of these are rules that constrain people's behavior.

Question 5

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)  the prisoner's dilemma. 
B)  the first-mover advantage. 
C)  a sequential game. 
D)  a repeated game. 
A)  the prisoner's dilemma. 
B)  the first-mover advantage. 
C)  a sequential game. 
D)  a repeated game.

Question 6

A dominant strategy:

Accepted Answer

A)  exists in every game. 
B)  is the best one to follow no matter what strategy other players choose. 
C)  is always the same for all players of a game. 
D)  awards the highest achievable payoff in a game. 
A)  exists in every game. 
B)  is the best one to follow no matter what strategy other players choose. 
C)  is always the same for all players of a game. 
D)  awards the highest achievable payoff in a game.

Question 7

The famous historical example of the commitment strategy used by Cortes against the Aztecs is sometimes referred to as:

Accepted Answer

A)  "burning your boats." 
B)  "burning your bridges." 
C)  "friendly fire." 
D)  "putting all your eggs in one basket." 
A)  "burning your boats." 
B)  "burning your bridges." 
C)  "friendly fire." 
D)  "putting all your eggs in one basket."

Question 8

First-mover advantage is:

Accepted Answer

A)  most advantageous in a prisoner's dilemma-type game. 
B)  very important in one-round sequential games. 
C)  likely to lead to a positive-positive outcome. 
D)  None of these statements is true. 
A)  most advantageous in a prisoner's dilemma-type game. 
B)  very important in one-round sequential games. 
C)  likely to lead to a positive-positive outcome. 
D)  None of these statements is true.

Question 9

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 outcome of the game in the figure shown predicts that Joe will earn utility of:

Accepted Answer

A)  5. 
B)  7. 
C)  9. 
D)  13. 
A)  5. 
B)  7. 
C)  9. 
D)  13.

Question 10

According to the figure shown:

Accepted Answer

A)  there is no stable equilibrium to the game. 
B)  both players will act in their own self-interest and get a stable, but less than optimum, equilibrium. 
C)  both players will act in their own self-interest and get an optimum equilibrium that is stable. 
D)  both players have an incentive to charge a low price and undercut the competition. 
A)  there is no stable equilibrium to the game. 
B)  both players will act in their own self-interest and get a stable, but less than optimum, equilibrium. 
C)  both players will act in their own self-interest and get an optimum equilibrium that is stable. 
D)  both players have an incentive to charge a low price and undercut the competition.

Question 11

Two players who are both playing tit-for-tat can quickly find their way toward:

Accepted Answer

A)  lasting cooperation. 
B)  noncooperative outcomes for the remaining rounds. 
C)  a cycle of cooperation and noncooperation, similar to a business cycle. 
D)  None of these statements is true. 
A)  lasting cooperation. 
B)  noncooperative outcomes for the remaining rounds. 
C)  a cycle of cooperation and noncooperation, similar to a business cycle. 
D)  None of these statements is true.

Question 12

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

Accepted Answer

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

Question 13

The tit-for-tat strategy:

Accepted Answer

A)  is not effective in repeated games. 
B)  is not possible in single-round games. 
C)  makes cooperation unlikely. 
D)  All of these statements are true. 
A)  is not effective in repeated games. 
B)  is not possible in single-round games. 
C)  makes cooperation unlikely. 
D)  All of these statements are true.

Question 14

In games,strategies are:

Accepted Answer

A)  the outcomes players want to achieve. 
B)  the same for everyone to achieve the same goal. 
C)  the plans of action that players follow to achieve their goals. 
D)  All of these statements are true. 
A)  the outcomes players want to achieve. 
B)  the same for everyone to achieve the same goal. 
C)  the plans of action that players follow to achieve their goals. 
D)  All of these statements are true.

Question 15

The game in the figure shown is a version of:

Accepted Answer

A)  the prisoner's dilemma. 
B)  the first-mover advantage. 
C)  a sequential game. 
D)  a repeated game. 
A)  the prisoner's dilemma. 
B)  the first-mover advantage. 
C)  a sequential game. 
D)  a repeated game.

Question 16

According to the figure shown,Adidas:

Accepted Answer

A)  should charge a low price, regardless of what Nike chooses to do. 
B)  should charge a high price, regardless of what Nike chooses to do. 
C)  does not have a dominant strategy. 
D)  should take the first-mover advantage and charge a low price. 
A)  should charge a low price, regardless of what Nike chooses to do. 
B)  should charge a high price, regardless of what Nike chooses to do. 
C)  does not have a dominant strategy. 
D)  should take the first-mover advantage and charge a low price.

Question 17

Commitment strategies:

Accepted Answer

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

Question 18

If the players in the figure shown act in their own self-interest,then we know that Adidas will earn:

Accepted Answer

A)  $2 million. 
B)  $8 million. 
C)  $6 million. 
D)  $10 million. 
A)  $2 million. 
B)  $8 million. 
C)  $6 million. 
D)  $10 million.

Question 19

By committing to reduce one's options during a sequential game,a player can force a change in his opponents' strategy,and that commitment strategy results in a:

Accepted Answer

A)  payoff that he likely would have gotten anyway. 
B)  cooperative equilibrium. 
C)  payoff that would otherwise be out of reach. 
D)  negative-negative outcome. 
A)  payoff that he likely would have gotten anyway. 
B)  cooperative equilibrium. 
C)  payoff that would otherwise be out of reach. 
D)  negative-negative outcome.

Question 20

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.
According to the figure shown,Starbucks:

Accepted Answer

A)  has a dominant strategy to expand. 
B)  has a dominant strategy not to expand. 
C)  has first-mover advantage. 
D)  should wait to see what Dunkin Donuts is going to do. 
A)  has a dominant strategy to expand. 
B)  has a dominant strategy not to expand. 
C)  has first-mover advantage. 
D)  should wait to see what Dunkin Donuts is going to do.

A dominant strategy is one:

In games:

When a strategy is the best one to follow no matter what strategy other players choose,it is called a:

In real life,people's behavior is constrained by:

A dominant strategy:

The famous historical example of the commitment strategy used by Cortes against the Aztecs is sometimes referred to as:

First-mover advantage is:

According to the figure shown:

Two players who are both playing tit-for-tat can quickly find their way toward:

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

The tit-for-tat strategy:

In games,strategies are:

The game in the figure shown is a version of:

According to the figure shown,Adidas:

Commitment strategies:

If the players in the figure shown act in their own self-interest,then we know that Adidas will earn:

By committing to reduce one's options during a sequential game,a player can force a change in his opponents' strategy,and that commitment strategy results in a:

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Exam 9: Game Theory and Strategic Thinking

A dominant strategy is one:

In games:

When a strategy is the best one to follow no matter what strategy other players choose,it is called a:

In real life,people's behavior is constrained by:

A dominant strategy:

The famous historical example of the commitment strategy used by Cortes against the Aztecs is sometimes referred to as:

First-mover advantage is:

According to the figure shown:

Two players who are both playing tit-for-tat can quickly find their way toward:

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

The tit-for-tat strategy:

In games,strategies are:

The game in the figure shown is a version of:

According to the figure shown,Adidas:

Commitment strategies:

If the players in the figure shown act in their own self-interest,then we know that Adidas will earn:

By committing to reduce one's options during a sequential game,a player can force a change in his opponents' strategy,and that commitment strategy results in a:

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