The figure below presents information for a one-shot game. $\begin{array}{l} \quad\quad\quad\quad\quad\text { Firm B }\\ \text { Firm A} \begin{array}{|l|l|l|} \hline & \text { Low Price } & \text { High Price } \\ \hline \text { Low Price } & (2,2) & (10,-8) \\ \hline \text { HighPrice } & (-8,10) & (6,6) \\ \hline \end{array}\end{array}$ What are secure strategies for firm A and firm B respectively?

A) (low price, high price) B) (high price, low price) C) (high price, high price) D) (low price, low price) A) (low price, high price) B) (high price, low price) C) (high price, high price) D) (low price, low price) D

In the game shown below,firms 1 and 2 must independently decide whether to charge high or low prices. $\begin{array}{l} \quad\quad\quad\quad\quad\text { Firm Two }\\ \text { Firm One } \begin{array}{|l|l|l|} \hline & \text { High Price } & \text { Low Price } \\ \hline \text { High Price } & (10,10) & (5,-5) \\ \hline \text { Low Price } & (5,-5) & (0,0) \\ \hline \end{array}\end{array}$ Which of the following are the Nash equilibrium payoffs (each period)if the game is repeated 10 times?

A) (0, 0) B) (5, -5) C) (-5, 5) D) (10, 10) A) (0, 0) B) (5, -5) C) (-5, 5) D) (10, 10)

Refer to the normal-form game of price competition shown below. $\begin{array}{l} \quad\quad\quad\quad\quad\quad\text { Firm B}\\ \text { Firm A} \begin{array}{|l|l|l|} \hline & \text { C } & \text { D }\\ \hline & & \\ \text { A } & 50,50 & 500-x, 200 \\ \hline & & \\ \text { B } & 100,500-x & 50,50 \\ \hline \end{array}\end{array}$ For what values of x is strategy B strictly dominant for firm A?

A) All x > 450 B) All x 450 B) All x < 450 C) x = 450 D) x < 50

Refer to the normal-form game of price competition shown below. $\begin{array}{l} \quad\quad\quad\quad\quad\quad\text { Firm B}\\ \text { Firm A} \begin{array}{|l|l|l|} \hline & \text { C } & \text { D }\\ \hline & & \\ \text { A } & 0,7 & 5,2\\ \hline & & \\ \text { B } & 5,1 & 0,8 \\ \hline \end{array}\end{array}$ Which of the following represents the set of possible pure strategy Nash equilibria?

A) {A, C} B) {A, B} C) {(A, C) , (A, D) , (B, C) , (B, D) } D) {C, D} A) {A, C} B) {A, B} C) {(A, C) , (A, D) , (B, C) , (B, D) } D) {C, D}

Refer to the following game. $\begin{array}{c} \text { Player 2 }\\ \text { Player 1} \begin{array}{|l|l|l|l|} \hline & \mathrm{t} 1 & \mathrm{t} 2 & \mathrm{t} 3 \\ \hline & & & \\ \mathrm{S} 1 & 4,10 & 3,0 & 1,3 \\ \hline & & & \\ \mathrm{S} 2 & 0,0 & 2,10 & 10,3 \\ \hline \end{array}\end{array}$ Which of the following strategies constitutes a Nash equilibrium?

A) S1, t1 B) S2, t2 C) S2, t3 D) S1, t2 A) S1, t1 B) S2, t2 C) S2, t3 D) S1, t2

In the game depicted below,firms 1 and 2 must independently decide whether to charge high or low prices. $\begin{array}{c} \text { Firm 2}\\ \text { Firm 1} \begin{array}{|l|l|l|} \hline &\text { High Price } & \text { Low Price }\\ \hline & & \\ \text { High Price } & (10,10) & (5,-5) \\ \hline & & \\ \text { Low Price } & (-5,5) & (0,0)\\ \hline \end{array}\end{array}$ If player 1 charges a high price when player 2 charges a low price,then player 2 earns:

A) 10. B) 5. C) ?5. D) 0. A) 10. B) 5. C) ?5. D) 0.

Refer to the normal-form game of price competition in the payoff matrix below. $\begin{array}{c} \text { Firm B }\\ \text { Firm A} \begin{array}{|l|l|l|} \hline & \text { Low Price } & \text { High Price } \\ \hline & & \\ \text { Low Price } & 0,0 & 50,-10 \\ \hline & & \\ \text { High Price } & -10,50 & 20,20\\ \hline \end{array}\end{array}$ Suppose that firm A deviates from a trigger strategy to support a high price.What is the present value of A's payoff from cheating?

A) 70 B) 50 C) 30 D) 20 A) 70 B) 50 C) 30 D) 20

Refer to the following game. $\begin{array}{l} \quad\quad\quad\quad\quad\text { Firm B }\\ \text { Firm A} \begin{array}{|l|l|l|} \hline & \text {Low Price } & \text { High Price } \\ \hline \text {Low Price } & (10,9) & (15,8) \\ \hline \text { High Price } & (-10,7) & (11,11) \\ \hline \end{array}\end{array}$ Which of the following is true?

A) A dominant strategy for firm A is "high price." B) There does not exist a dominant strategy for firm A. C) A dominant strategy for firm B is "low price." D) None of the preceding answers is correct. A) A dominant strategy for firm A is "high price." B) There does not exist a dominant strategy for firm A. C) A dominant strategy for firm B is "low price." D) None of the preceding answers is correct.

Based on the following game,what are the secure strategies for player 1 and player 2? $\begin{array}{c} \text { Player 2 }\\ \text { Player 1} \begin{array}{|l|l|l|} \hline & \mathrm{t} 1 & \mathrm{t} 2 \\ \hline & & \\ \mathrm{S} 1 & 10,15 & 15,8 \\ \hline & & \\ \text { S2 } & -10,7 & 10,20\\ \hline \end{array}\end{array}$

A) S1 and t2 B) S1 and t1 C) S2 and t2 D) S2 and t1 A) S1 and t2 B) S1 and t1 C) S2 and t2 D) S2 and t1

Refer to the payoff matrix below. $\begin{array}{c} \quad\quad\quad\quad\quad\quad\text { Player 2}\\ \text { Player 1 } \begin{array}{|l|l|l|l|} \hline & \text { t1 } & \text { t2 } & \text { t3 } \\ \hline & & & \\ \mathrm{S} 1 & 20,0 & 15,1 & 5,-100 \\ \hline & & & \\ \mathrm{S} 2 & 20,200 & 10,0 & 5,-50\\ \hline \end{array}\end{array}$ The dominant strategy of Player 1 is:

A) S1. B) S2. C) S1 and S2. D) A dominant strategy does not exist. A) S1. B) S2. C) S1 and S2. D) A dominant strategy does not exist.

Exam 10: Game Theory: Inside Oligopoly

Consider the following innovation game: Firm A must decide whether or not to introduce a new product.Firm B must decide whether or not to clone firm A's product.If firm A introduces and B clones,then firm A earns $2 and B earns $15.If A introduces and B does not clone,then A earns $8 and B earns $1.If firm A does not introduce,both firms earn profits of 0.Which of the following is true?

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

A

The figure below presents information for a one-shot game. Firm B Firm A Low Price High Price Low Price (2,2) (10,-8) HighPrice (-8,10) (6,6) What are secure strategies for firm A and firm B respectively?

Free

(Multiple Choice)

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Question 2

Correct Answer:

Verified

D

A coordination problem usually occurs in situations where there is:

Free

(Multiple Choice)

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Question 3

Correct Answer:

Verified

D

OPEC was an effective cartel for many years,but recently it has been unable to maintain a high price for oil.What factors do you think are contributing to the demise of OPEC?

(Essay)

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Question 4

When a worker announces that he plans to quit,say next month,the "threat" of being fired has no bite.The worker may find it in his interest to shirk.What can the manager do to overcome this problem?

(Multiple Choice)

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Question 5

Consider the following entry game: Here,firm B is an existing firm in the market,and firm A is a potential entrant.Firm A must decide whether to enter the market (play "enter")or stay out of the market (play "not enter").If firm A decides to enter the market,firm B must decide whether to engage in a price war (play "hard"),or not (play "soft").By playing "hard," firm B ensures that firm A makes a loss of $1 million,but firm B only makes $1 million in profits.On the other hand,if firm B plays "soft," the new entrant takes half of the market,and each firm earns profits of $5 million.If firm A stays out,it earns zero while firm B earns $10 million.Which of the following are perfect equilibrium strategies?

(Multiple Choice)

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Question 6

In the game shown below,firms 1 and 2 must independently decide whether to charge high or low prices. Firm Two Firm One High Price Low Price High Price (10,10) (5,-5) Low Price (5,-5) (0,0) Which of the following are the Nash equilibrium payoffs (each period)if the game is repeated 10 times?

(Multiple Choice)

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Question 7

Refer to the normal-form game of price competition shown below. Firm B Firm A C D A 50,50 500-x,200 B 100,500-x 50,50 For what values of x is strategy B strictly dominant for firm A?

(Multiple Choice)

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Question 8

Refer to the normal-form game of price competition shown below. Firm B Firm A C D A 0,7 5,2 B 5,1 0,8 Which of the following represents the set of possible pure strategy Nash equilibria?

(Multiple Choice)

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Question 9

Which of the following enhances the ability of waste companies to collude?

(Multiple Choice)

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Question 10

Refer to the following game. Player 2 Player 1 1 2 3 1 4,10 3,0 1,3 2 0,0 2,10 10,3 Which of the following strategies constitutes a Nash equilibrium?

(Multiple Choice)

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Question 11

In the game depicted below,firms 1 and 2 must independently decide whether to charge high or low prices. Firm 2 Firm 1 High Price Low Price High Price (10,10) (5,-5) Low Price (-5,5) (0,0) If player 1 charges a high price when player 2 charges a low price,then player 2 earns:

(Multiple Choice)

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Question 12

Refer to the normal-form game of price competition in the payoff matrix below. Firm B Firm A Low Price High Price Low Price 0,0 50,-10 High Price -10,50 20,20 Suppose that firm A deviates from a trigger strategy to support a high price.What is the present value of A's payoff from cheating?

(Multiple Choice)

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Question 13

A coordination problem arises whenever there:

(Multiple Choice)

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Question 14

Which of the following is NOT true?

(Multiple Choice)

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Question 15

Refer to the following game. Firm B Firm A Low Price High Price Low Price (10,9) (15,8) High Price (-10,7) (11,11) Which of the following is true?

(Multiple Choice)

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Question 16

It is easier to sustain tacit collusion in an infinitely repeated game if:

(Multiple Choice)

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Question 17

Based on the following game,what are the secure strategies for player 1 and player 2? Player 2 Player 1 1 2 1 10,15 15,8 S2 -10,7 10,20

(Multiple Choice)

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Question 18

It is easier to sustain tacit collusion in an infinitely repeated game if:

(Multiple Choice)

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Question 19

Refer to the payoff matrix below. Player 2 Player 1 t1 t2 t3 1 20,0 15,1 5,-100 2 20,200 10,0 5,-50 The dominant strategy of Player 1 is:

(Multiple Choice)

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Question 20

The figure below presents information for a one-shot game. Firm B Firm A Low Price High Price Low Price (2,2) (10,-8) HighPrice (-8,10) (6,6) What are secure strategies for firm A and firm B respectively?

A coordination problem usually occurs in situations where there is:

OPEC was an effective cartel for many years,but recently it has been unable to maintain a high price for oil.What factors do you think are contributing to the demise of OPEC?

When a worker announces that he plans to quit,say next month,the "threat" of being fired has no bite.The worker may find it in his interest to shirk.What can the manager do to overcome this problem?

In the game shown below,firms 1 and 2 must independently decide whether to charge high or low prices. Firm Two Firm One High Price Low Price High Price (10,10) (5,-5) Low Price (5,-5) (0,0) Which of the following are the Nash equilibrium payoffs (each period)if the game is repeated 10 times?

Refer to the normal-form game of price competition shown below. Firm B Firm A C D A 50,50 500-x,200 B 100,500-x 50,50 For what values of x is strategy B strictly dominant for firm A?

Refer to the normal-form game of price competition shown below. Firm B Firm A C D A 0,7 5,2 B 5,1 0,8 Which of the following represents the set of possible pure strategy Nash equilibria?

Which of the following enhances the ability of waste companies to collude?

Refer to the following game. Player 2 Player 1 1 2 3 1 4,10 3,0 1,3 2 0,0 2,10 10,3 Which of the following strategies constitutes a Nash equilibrium?

In the game depicted below,firms 1 and 2 must independently decide whether to charge high or low prices. Firm 2 Firm 1 High Price Low Price High Price (10,10) (5,-5) Low Price (-5,5) (0,0) If player 1 charges a high price when player 2 charges a low price,then player 2 earns:

Refer to the normal-form game of price competition in the payoff matrix below. Firm B Firm A Low Price High Price Low Price 0,0 50,-10 High Price -10,50 20,20 Suppose that firm A deviates from a trigger strategy to support a high price.What is the present value of A's payoff from cheating?

A coordination problem arises whenever there:

Which of the following is NOT true?

Refer to the following game. Firm B Firm A Low Price High Price Low Price (10,9) (15,8) High Price (-10,7) (11,11) Which of the following is true?

It is easier to sustain tacit collusion in an infinitely repeated game if:

Based on the following game,what are the secure strategies for player 1 and player 2? Player 2 Player 1 1 2 1 10,15 15,8 S2 -10,7 10,20

It is easier to sustain tacit collusion in an infinitely repeated game if:

Refer to the payoff matrix below. Player 2 Player 1 t1 t2 t3 1 20,0 15,1 5,-100 2 20,200 10,0 5,-50 The dominant strategy of Player 1 is:

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

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