Exam 14: Game Theory and the Economics of Information

A prisoner's dilemma game is one in which:

Which of the following practices allows insurance firms to reduce the costs imposed by the high-risk customers?

The table given below represents the payoff matrix of firms A and B,when they choose to produce either high output or low output.In each cell,the figure on the left indicates Firm B's payoffs and the figure on the right indicates Firm A's payoffs. -Given the information in Table 14-3,if X = 10 and Y = 15,which firm has a dominant strategy?

To avoid getting a "lemon" house,buyers hire inspectors because:

The table given below describes the payoffs to Jack and Jill when each chooses to produce rock,scissors,or paper.The payoff matrix indicates the dollar payments from the loser to the winner. Table 14-4 -Refer to Table 14-4.Identify the Nash equilibrium,if any.

Empirical analysis with respect to the used car market suggests that:

The "lemons" model suggests that in cases of asymmetric information between buyers and sellers:

A repeated game is a game:

The table given below represents the payoff matrix of firms A and B,when they choose to produce low or high output.In each cell,the figure on the left indicates Firm B's payoffs and the figure on the right indicates Firm A's payoffs. -Given the information in Table 14-2,which firm has a dominant strategy?

Which of the following lowers the marginal benefit from a search related to a product?

The table given below shows the payoffs (in terms of years spent in the jail)to Sundance and Butch who choose between the options 'confess' and 'don't confess'.In each cell,the figure on the left indicates payoffs for Butch and the figure on the right indicates payoffs for Sundance. -In Table 14-5,what values will not make this payoff matrix a prisoner's dilemma?

The table given below shows the payoffs to Firm A and Firm B if they choose to produce either high output or low output.In each cell,the figure on the left indicates Firm A's payoffs and the figure on the right indicates Firm B's payoffs. -With reference to the payoff matrix in Table 14-1,which firm has a dominant strategy?

A tit-for-tat strategy is one in which:

Which of the following product markets is most likely to be characterized by the "lemons" problem?

Which of the following oligopoly models has an equilibrium that can be described as a Nash equilibrium?

Which of the following,if true,would decrease the stability of a cartel?

The "lemons" model suggests that in cases of asymmetric information between buyers and sellers:

Define adverse selection and moral hazard and give examples of each.

How will the demand curve faced by a firm change when all the firms in an industry start advertising their product,compared to the situation when only this firm was advertising?

A buildup of nuclear weapons between two or more nations appears both counterproductive and counterintuitive.But one theory,Mutually Assured Destruction,argues that it is to a nation's benefit to amass an arsenal of weapons so vast that their use could destroy the whole world.Using a prisoner's dilemma matrix with a Nash equilibrium,show how that Country A choosing a strategy of spending vast amounts on nuclear weaponry (call it "High"),enough to destroy all of society,rather than a smaller amount (call it "Low),sufficient for self-defense only,is a dominant strategy and a deterrent over Country B.