Question 1

An incumbent announces it will significantly increase output in the next period,but only has contracts for the amount produced this period.The announcement is a

Accepted Answer

A) credible threat. 
B) non-credible threat. 
C) commitment. 
D) mixed strategy. 
A) credible threat. 
B) non-credible threat. 
C) commitment. 
D) mixed strategy.

Question 2

Which of the following statements about winner's curse is wrong?

Accepted Answer

A) Overbidding occurs when bidders are uncertain about the true value of the good. 
B) The phenomenon occurs in common value auctions. 
C) When intelligent bidders shade their bids,sellers receive more money with a sealed-bid auction than an English auction 
D) The phenomenon will not occur in private value auctions. 
A) Overbidding occurs when bidders are uncertain about the true value of the good. 
B) The phenomenon occurs in common value auctions. 
C) When intelligent bidders shade their bids,sellers receive more money with a sealed-bid auction than an English auction 
D) The phenomenon will not occur in private value auctions.

Question 3

Which of the following games is NOT analyzed with game theory?

Accepted Answer

A) State Lottery 
B) Poker 
C) Car Chases 
D) Auctions 
A) State Lottery 
B) Poker 
C) Car Chases 
D) Auctions

Question 4

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,how many Nash equilibria are there?

Accepted Answer

A) 0 
B) 1 
C) 2 
D) It cannot be determined. 
A) 0 
B) 1 
C) 2 
D) It cannot be determined.

Question 5

In Dutch or first-price sealed-bid auctions,participants will bid less than their highest valuation.

Accepted Answer

A) True 
 B)False

Question 6

Suppose two firms,A and B,are simultaneously considering entry into a new market.If neither enters,both earn zero.If both enter,they both lose 100.If one firm enters,it gains 50 while the other earns zero.Set up the payoff matrix for this game and determine if any Nash equilibria exist.Can you predict the outcome? What if firm A gets to decide first?

Accepted Answer

@#IMG-DLM& See the above figure.There are two Nash

Question 7

A sale in which property or a service is sold to the highest bidder is called a(n)

Accepted Answer

A) auction. 
B) bidder sale. 
C) competitive market. 
D) Austrian bundle. 
A) auction. 
B) bidder sale. 
C) competitive market. 
D) Austrian bundle.

Question 8

a.Suppose c = 0.Find any (pure strategy)Nash Equilibrium.
b.Suppose c = 2.Find any (pure strategy)Nash Equilibrium.

Accepted Answer

a.There ar

Question 9

If each player has a dominant strategy,then those strategies make up the Nash equilibrium.

Accepted Answer

A) True 
 B)False

Question 10

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,what happens if the government imposes a $20 per firm tax on firms that service this route?

Accepted Answer

A) Neither firm has a dominant strategy. 
B) Not entering is a dominant strategy for both firms. 
C) Neither firm entering is a Nash equilibrium. 
D) Only firm A will enter. 
A) Neither firm has a dominant strategy. 
B) Not entering is a dominant strategy for both firms. 
C) Neither firm entering is a Nash equilibrium. 
D) Only firm A will enter.

Question 11

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,what will happen if the government offers a $30 subsidy to airlines that serve this route?

Accepted Answer

A) The Nash equilibrium remains the same. 
B) Only firm A will have a dominant strategy. 
C) Both firms will choose to enter the market. 
D) Joint profits will be maximized. 
A) The Nash equilibrium remains the same. 
B) Only firm A will have a dominant strategy. 
C) Both firms will choose to enter the market. 
D) Joint profits will be maximized.

Question 12

-The above figure shows the payoff matrix for two firms,A and B,choosing to produce a basic computer or an advanced computer.Now the payoff of the firm who produces a basic computer falls to 10 if the other firm chooses to produce an advanced computer.Then

Accepted Answer

A) both firms will have dominant strategies. 
B) Nash equilibria will not change. 
C) joint profits will be maximized at the Nash equilibrium. 
D) Firm A and firm B will choose different actions. 
A) both firms will have dominant strategies. 
B) Nash equilibria will not change. 
C) joint profits will be maximized at the Nash equilibrium. 
D) Firm A and firm B will choose different actions.

Question 13

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

Accepted Answer

A) Only firm A will enter the market. 
B) Only firm B will enter the market. 
C) Neither firm entering is a Nash equilibrium. 
D) The outcome of the game is unpredictable. 
A) Only firm A will enter the market. 
B) Only firm B will enter the market. 
C) Neither firm entering is a Nash equilibrium. 
D) The outcome of the game is unpredictable.

Question 14

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,what will happen if the government offers a $30 subsidy to airlines that serve this route?

Accepted Answer

A) Both firms will enter profitably. 
B) Firm A will decide not to enter since firm B will. 
C) Firm B is still better off not entering. 
D) Neither firm will have a dominant strategy. 
A) Both firms will enter profitably. 
B) Firm A will decide not to enter since firm B will. 
C) Firm B is still better off not entering. 
D) Neither firm will have a dominant strategy.

Question 15

A Nash equilibrium will always provide both players with their highest payoffs possible.

Accepted Answer

A) True 
 B)False

Question 16

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,and the government imposes a $20 per firm tax on firms that service this route,which of the following maximizes the firms' joint profits?

Accepted Answer

A) Neither firm services the route. 
B) Firm A offers firm B $20 to not enter. 
C) Both firms will service this route. 
D) Firm B offers firm A $30 to not enter. 
A) Neither firm services the route. 
B) Firm A offers firm B $20 to not enter. 
C) Both firms will service this route. 
D) Firm B offers firm A $30 to not enter.

Question 17

In a non-cooperative,imperfect information,simultaneous-choice,one-period game,a Nash equilibrium

Accepted Answer

A) will never exist. 
B) will always include dominant strategies. 
C) will always result in both players taking the same action. 
D) may not maximize the sum of the firms' profits. 
A) will never exist. 
B) will always include dominant strategies. 
C) will always result in both players taking the same action. 
D) may not maximize the sum of the firms' profits.

Question 18

-The above figure shows the payoffs to two airlines,A and B,of serving a particular route.Is there a Nash equilibrium? What is it? Explain.

Accepted Answer

Firm A entering and firm B not entering

Question 19

-The above figure shows the payoff to two gasoline stations,A and B,deciding to operate in an isolated town.Suppose a $60 fee is required to enter the market.If firm A chooses its strategy first,then

Accepted Answer

A) firm A will not enter. 
B) neither firm will enter. 
C) both firms will enter. 
D) firm A will enter and firm B will not. 
A) firm A will not enter. 
B) neither firm will enter. 
C) both firms will enter. 
D) firm A will enter and firm B will not.

Question 20

-The above figure shows a payoff matrix for two firms,A and B,that must choose between a high-price strategy and a low-price strategy.The Nash equilibrium in this game

Accepted Answer

A) does not exist. 
B) occurs when both firms set a low price. 
C) occurs when both firms set a high price. 
D) occurs when firm A sets a high price and firm B sets a low price. 
A) does not exist. 
B) occurs when both firms set a low price. 
C) occurs when both firms set a high price. 
D) occurs when firm A sets a high price and firm B sets a low price.

An incumbent announces it will significantly increase output in the next period,but only has contracts for the amount produced this period.The announcement is a

Which of the following statements about winner's curse is wrong?

Which of the following games is NOT analyzed with game theory?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,how many Nash equilibria are there?

In Dutch or first-price sealed-bid auctions,participants will bid less than their highest valuation.

A sale in which property or a service is sold to the highest bidder is called a(n)

a.Suppose c = 0.Find any (pure strategy)Nash Equilibrium. b.Suppose c = 2.Find any (pure strategy)Nash Equilibrium.

If each player has a dominant strategy,then those strategies make up the Nash equilibrium.

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,what happens if the government imposes a $20 per firm tax on firms that service this route?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,what will happen if the government offers a $30 subsidy to airlines that serve this route?

-The above figure shows the payoff matrix for two firms,A and B,choosing to produce a basic computer or an advanced computer.Now the payoff of the firm who produces a basic computer falls to 10 if the other firm chooses to produce an advanced computer.Then

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,what will happen if the government offers a $30 subsidy to airlines that serve this route?

A Nash equilibrium will always provide both players with their highest payoffs possible.

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,and the government imposes a $20 per firm tax on firms that service this route,which of the following maximizes the firms' joint profits?

In a non-cooperative,imperfect information,simultaneous-choice,one-period game,a Nash equilibrium

-The above figure shows the payoffs to two airlines,A and B,of serving a particular route.Is there a Nash equilibrium? What is it? Explain.

-The above figure shows the payoff to two gasoline stations,A and B,deciding to operate in an isolated town.Suppose a $60 fee is required to enter the market.If firm A chooses its strategy first,then

-The above figure shows a payoff matrix for two firms,A and B,that must choose between a high-price strategy and a low-price strategy.The Nash equilibrium in this game

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 13: Game Theory

An incumbent announces it will significantly increase output in the next period,but only has contracts for the amount produced this period.The announcement is a

Which of the following statements about winner's curse is wrong?

Which of the following games is NOT analyzed with game theory?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,how many Nash equilibria are there?

In Dutch or first-price sealed-bid auctions,participants will bid less than their highest valuation.

A sale in which property or a service is sold to the highest bidder is called a(n)

a.Suppose c = 0.Find any (pure strategy)Nash Equilibrium. b.Suppose c = 2.Find any (pure strategy)Nash Equilibrium.

If each player has a dominant strategy,then those strategies make up the Nash equilibrium.

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,what happens if the government imposes a $20 per firm tax on firms that service this route?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,what will happen if the government offers a $30 subsidy to airlines that serve this route?

-The above figure shows the payoff matrix for two firms,A and B,choosing to produce a basic computer or an advanced computer.Now the payoff of the firm who produces a basic computer falls to 10 if the other firm chooses to produce an advanced computer.Then

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,what will happen if the government offers a $30 subsidy to airlines that serve this route?

A Nash equilibrium will always provide both players with their highest payoffs possible.

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,and the government imposes a $20 per firm tax on firms that service this route,which of the following maximizes the firms' joint profits?

In a non-cooperative,imperfect information,simultaneous-choice,one-period game,a Nash equilibrium

-The above figure shows the payoffs to two airlines,A and B,of serving a particular route.Is there a Nash equilibrium? What is it? Explain.

-The above figure shows the payoff to two gasoline stations,A and B,deciding to operate in an isolated town.Suppose a $60 fee is required to enter the market.If firm A chooses its strategy first,then

-The above figure shows a payoff matrix for two firms,A and B,that must choose between a high-price strategy and a low-price strategy.The Nash equilibrium in this game

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters