Question 1

The prisoner's dilemma:

Accepted Answer

A)  can be summarized in a payoff matrix. 
B)  can involve two players. 
C)  leads to a less-than-ideal outcome for all players. 
D)  All of these statements are true. 
A)  can be summarized in a payoff matrix. 
B)  can involve two players. 
C)  leads to a less-than-ideal outcome for all players. 
D)  All of these statements are true.

Question 2

In the prisoner's dilemma:

Accepted Answer

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

Question 3

The tit-for-tat strategy is:

Accepted Answer

A)  one in which a player in a repeated game takes the same action that his or her opponent did in the preceding round. 
B)  one in which both players explicitly agree to compete in the first round of a repeated game, and if one of them cooperates, the other will defect. 
C)  not effective in prisoner's dilemma type games. 
D)  All of these statements are true. 
A)  one in which a player in a repeated game takes the same action that his or her opponent did in the preceding round. 
B)  one in which both players explicitly agree to compete in the first round of a repeated game, and if one of them cooperates, the other will defect. 
C)  not effective in prisoner's dilemma type games. 
D)  All of these statements are true.

Question 4

Games:

Accepted Answer

A)  will always have a dominant strategy. 
B)  are always zero sum. 
C)  will always have several stable outcomes. 
D)  None of the above are true. 
A)  will always have a dominant strategy. 
B)  are always zero sum. 
C)  will always have several stable outcomes. 
D)  None of the above are true.

Question 5

The prisoner's dilemma game can be used to describe

Accepted Answer

A)  the game Rock Paper Scissors 
B)  why candidates in elections go negative. 
C)  how individuals acting in their self-interest leads to the best outcome overall. 
D)  a zero sum game. 
A)  the game Rock Paper Scissors 
B)  why candidates in elections go negative. 
C)  how individuals acting in their self-interest leads to the best outcome overall. 
D)  a zero sum game.

Question 6

Once a Nash equilibrium has been found in a game:

Accepted Answer

A)  a stable outcome is impossible. 
B)  the players have no incentive to change their choice. 
C)  the players always have an incentive to change their choice. 
D)  no one in the game can be made better off. 
A)  a stable outcome is impossible. 
B)  the players have no incentive to change their choice. 
C)  the players always have an incentive to change their choice. 
D)  no one in the game can be made better off.

Question 7

The prisoner's dilemma can be summarized in:

Accepted Answer

A)  a strategy matrix. 
B)  a strategy tree. 
C)  a decision matrix. 
D)  a flowchart. 
A)  a strategy matrix. 
B)  a strategy tree. 
C)  a decision matrix. 
D)  a flowchart.

Question 8

Collusion:

Accepted Answer

A)  occurs only when no dominant strategy is present. 
B)  is a cooperative outcome between competitors. 
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)  is a cooperative outcome between competitors. 
C)  is observed, but economists cannot theoretically model it. 
D)  is a theoretical concept that is rarely observed.

Question 9

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 10

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 will be:

Accepted Answer

A)  Joe puts forth high effort and Sarah puts forth low effort. 
B)  Joe puts forth low effort and Sarah puts forth high effort. 
C)  Joe and Sarah both put forth low effort. 
D)  Joe and Sarah both put forth high effort. 
A)  Joe puts forth high effort and Sarah puts forth low effort. 
B)  Joe puts forth low effort and Sarah puts forth high effort. 
C)  Joe and Sarah both put forth low effort. 
D)  Joe and Sarah both put forth high effort.

Question 11

A commitment strategy can:

Accepted Answer

A)  be used to change people's payoffs to gain cooperation. 
B)  allow players to reach a mutually beneficial equilibrium that would otherwise be difficult to maintain. 
C)  result in a positive-positive outcome. 
D)  All of these statements are true. 
A)  be used to change people's payoffs to gain cooperation. 
B)  allow players to reach a mutually beneficial equilibrium that would otherwise be difficult to maintain. 
C)  result in a positive-positive outcome. 
D)  All of these statements are true.

Question 12

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 13

All games involve which of the following?

Accepted Answer

A)  Strategies 
B)  Someone to enforce the rules 
C)  Cards or dice 
D)  Full information 
A)  Strategies 
B)  Someone to enforce the rules 
C)  Cards or dice 
D)  Full information

Question 14

In the prisoner's dilemma game:

Accepted Answer

A)  if players can communicate in advance, they will always cooperate. 
B)  if players can communicate in advance, they may still not cooperate. 
C)  will always choose to cooperate. 
D)  will only cooperate if they are trustworthy. 
A)  if players can communicate in advance, they will always cooperate. 
B)  if players can communicate in advance, they may still not cooperate. 
C)  will always choose to cooperate. 
D)  will only cooperate if they are trustworthy.

Question 15

Reaching a Nash equilibrium means that:

Accepted Answer

A)  the outcome will be positive-positive. 
B)  a cooperative equilibrium has been reached. 
C)  the players have reached a stable outcome where neither would wish to change his strategy once he finds out what the other player is doing. 
D)  the players have failed to reach a stable outcome because one player will always wish to change his strategy once he finds out what the other player is doing. 
A)  the outcome will be positive-positive. 
B)  a cooperative equilibrium has been reached. 
C)  the players have reached a stable outcome where neither would wish to change his strategy once he finds out what the other player is doing. 
D)  the players have failed to reach a stable outcome because one player will always wish to change his strategy once he finds out what the other player is doing.

Question 16

In the real world,wage negotiations typically do not drag on for years:

Accepted Answer

A)  because the company can simply offer the split that would eventually occur if the two sides played all the rounds. 
B)  because neither a company nor employees can afford to not work for that long. 
C)  unless the employees play an ultimatum game using a union to negotiate. 
D)  None of these statements is true. 
A)  because the company can simply offer the split that would eventually occur if the two sides played all the rounds. 
B)  because neither a company nor employees can afford to not work for that long. 
C)  unless the employees play an ultimatum game using a union to negotiate. 
D)  None of these statements is true.

Question 17

First-mover advantage is:

Accepted Answer

A)  more important in a repeated game than in a sequential game. 
B)  more important in a repeated sequential game than in a one-round sequential game. 
C)  more important to those who have less to bargain with. 
D)  more important in an ultimatum game than in a repeated game. 
A)  more important in a repeated game than in a sequential game. 
B)  more important in a repeated sequential game than in a one-round sequential game. 
C)  more important to those who have less to bargain with. 
D)  more important in an ultimatum game than in a repeated game.

Question 18

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 is a dominant strategy for a player depending on what the other player does. 
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 is a dominant strategy for a player depending on what the other player does.

Question 19

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.
According to the figure shown,Sarah:

Accepted Answer

A)  should put forth low effort, regardless of what Joe chooses to do. 
B)  should put forth high effort, regardless of what Joe choose to do. 
C)  does not have a dominant strategy. 
D)  should take the first-mover advantage and put forth low effort. 
A)  should put forth low effort, regardless of what Joe chooses to do. 
B)  should put forth high effort, regardless of what Joe choose to do. 
C)  does not have a dominant strategy. 
D)  should take the first-mover advantage and put forth low effort.

Question 20

Using a decision tree:

Accepted Answer

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

Exam 9: Game Theory and Strategic Thinking

The prisoner's dilemma:

In the prisoner's dilemma:

The tit-for-tat strategy is:

Games:

The prisoner's dilemma game can be used to describe

Once a Nash equilibrium has been found in a game:

The prisoner's dilemma can be summarized in:

Collusion:

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

A commitment strategy can:

The prisoner's dilemma is a game of strategy:

All games involve which of the following?

In the prisoner's dilemma game:

Reaching a Nash equilibrium means that:

In the real world,wage negotiations typically do not drag on for years:

First-mover advantage is:

In the prisoner's dilemma game:

Using a decision tree:

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