Question 1

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second 
 
-In Game 1 above,

Accepted Answer

A)  Player A has a dominant strategy. 
B)  Player B has a dominant strategy. 
C)  Both players have dominant strategies. 
D)  Neither player has a dominant strategy. 
A)  Player A has a dominant strategy. 
B)  Player B has a dominant strategy. 
C)  Both players have dominant strategies. 
D)  Neither player has a dominant strategy.

Question 2

In order to solve a sequential game

Accepted Answer

A)  The game is generally solved from the end of the game tree, finding the optimal decision at each decision point and working back to the beginning. 
B)  The game is generally solved from the beginning of the game tree, finding the optimal decision at each decision point and working towards the end. 
C)  Only a single player's payoffs are necessary. 
D)  Tit-for-tat strategies are particularly helpful. 
A)  The game is generally solved from the end of the game tree, finding the optimal decision at each decision point and working back to the beginning. 
B)  The game is generally solved from the beginning of the game tree, finding the optimal decision at each decision point and working towards the end. 
C)  Only a single player's payoffs are necessary. 
D)  Tit-for-tat strategies are particularly helpful.

Question 3

The prisoners' dilemma shows that in a Nash equilibrium

Accepted Answer

A)  neither player can have a better result than the other. 
B)  sometimes players do not reach the optimal outcome. 
C)  only an irrational strategy will lead to an outcome worse than the optimal outcome. 
D)  each player acting independently will lead to the optimal outcome. 
A)  neither player can have a better result than the other. 
B)  sometimes players do not reach the optimal outcome. 
C)  only an irrational strategy will lead to an outcome worse than the optimal outcome. 
D)  each player acting independently will lead to the optimal outcome.

Question 4

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second 
 
-Game 8 shows the payoff matrix in terms of profit (in millions of dollars) for two possible strategies: advertise or do not advertise. Suppose that the two companies can legally make a non-binding agreement to not advertise. Based on the payoff matrix shown above, will the two companies honor such an agreement to not advertise?

Accepted Answer

A)  Yes. Both Coke and Pepsi will not advertise. 
B)  No. Coke will advertise but Pepsi will not. 
C)  No. Pepsi will advertise but Coke will not. 
D)  No. Both Coke and Pepsi will advertise. 
A)  Yes. Both Coke and Pepsi will not advertise. 
B)  No. Coke will advertise but Pepsi will not. 
C)  No. Pepsi will advertise but Coke will not. 
D)  No. Both Coke and Pepsi will advertise.

Question 5

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second
 
-In Game 6 above,

Accepted Answer

A)  Player A has a dominant strategy. 
B)  Player B has a dominant strategy. 
C)  both players have dominant strategies. 
D)  neither player has a dominant strategy. 
A)  Player A has a dominant strategy. 
B)  Player B has a dominant strategy. 
C)  both players have dominant strategies. 
D)  neither player has a dominant strategy.

Question 6

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second
  
-Suppose in Game 4 above that the players make their choices sequentially, with Player A choosing first. The Nash equilibrium in this game will be

Accepted Answer

A)  Player A choosing A1 and Player B choosing B1. 
B)  Player A choosing A1 and Player B choosing B3. 
C)  Player A choosing A3 and Player B choosing B1. 
D)  Player A choosing A3 and Player B choosing B3. 
A)  Player A choosing A1 and Player B choosing B1. 
B)  Player A choosing A1 and Player B choosing B3. 
C)  Player A choosing A3 and Player B choosing B1. 
D)  Player A choosing A3 and Player B choosing B3.

Question 7

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second 
 
-In Game 1 above,

Accepted Answer

A)  Player A choosing A1 and Player B choosing B1 is a Nash equilibrium. 
B)  Player A choosing A2 and Player B choosing B2 is a Nash equilibrium. 
C)  there is no Nash equilibrium. 
D)  there are multiple Nash equilibria in pure strategies. 
A)  Player A choosing A1 and Player B choosing B1 is a Nash equilibrium. 
B)  Player A choosing A2 and Player B choosing B2 is a Nash equilibrium. 
C)  there is no Nash equilibrium. 
D)  there are multiple Nash equilibria in pure strategies.

Question 8

In a simultaneous move game with two players,

Accepted Answer

A)  if neither player has a dominant strategy, we successively eliminate each player's subordinate strategy. 
B)  a player chooses among two or more pure strategies according to pre-specified probabilities. 
C)  if one player has a dominant strategy and the other doesn't, you can't reach a Nash equilibrium. 
D)  if both players have a dominant strategy, these constitute their Nash equilibrium strategies. 
A)  if neither player has a dominant strategy, we successively eliminate each player's subordinate strategy. 
B)  a player chooses among two or more pure strategies according to pre-specified probabilities. 
C)  if one player has a dominant strategy and the other doesn't, you can't reach a Nash equilibrium. 
D)  if both players have a dominant strategy, these constitute their Nash equilibrium strategies.

Question 9

Which of the following is most consistent with the concept of a Nash equilibrium?

Accepted Answer

A)  A firm chooses its strategy with regard to pricing in collusion with another firm. 
B)  A player optimizes his/her outcome in a game by making his/her choice only after the other player has made his/her choice. 
C)  A firm makes its choice to optimize output without concerning itself as to what other firms are doing. 
D)  The players always optimize their level of output and no other variable. 
A)  A firm chooses its strategy with regard to pricing in collusion with another firm. 
B)  A player optimizes his/her outcome in a game by making his/her choice only after the other player has made his/her choice. 
C)  A firm makes its choice to optimize output without concerning itself as to what other firms are doing. 
D)  The players always optimize their level of output and no other variable.

Question 10

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second 
 
-In Game 3 above,

Accepted Answer

A)  B1 is a dominated strategy for Player B 
B)  B2 is a dominated strategy for Player B 
C)  B3 is a dominated strategy for Player B 
D)  Player B has no dominated strategy. 
A)  B1 is a dominated strategy for Player B 
B)  B2 is a dominated strategy for Player B 
C)  B3 is a dominated strategy for Player B 
D)  Player B has no dominated strategy.

Question 11

Player A and Player B are playing a prisoners' dilemma game. Which of the following statements is false?

Accepted Answer

A)  If the players play the game repeatedly with each other, the players may play cooperatively. 
B)  If the game is played only once, the players would not be expected to cooperate. 
C)  If players play the game repeatedly with each other, they are more likely to cooperate if they are patient. 
D)  If the game is played only once, the outcome minimizes total jail time. 
A)  If the players play the game repeatedly with each other, the players may play cooperatively. 
B)  If the game is played only once, the players would not be expected to cooperate. 
C)  If players play the game repeatedly with each other, they are more likely to cooperate if they are patient. 
D)  If the game is played only once, the outcome minimizes total jail time.

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second -In Game 1 above,

In order to solve a sequential game

The prisoners' dilemma shows that in a Nash equilibrium

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second -In Game 6 above,

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second -Suppose in Game 4 above that the players make their choices sequentially, with Player A choosing first. The Nash equilibrium in this game will be

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second -In Game 1 above,

In a simultaneous move game with two players,

Which of the following is most consistent with the concept of a Nash equilibrium?

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second -In Game 3 above,

Player A and Player B are playing a prisoners' dilemma game. Which of the following statements is false?

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Preferences and the Concept of Utility

Consumer Choice

The Theory of Demand

Inputs and Production Functions

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets: Applications

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

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Exam 14: Game Theory and Strategic Behavior

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second -In Game 1 above,

In order to solve a sequential game

The prisoners' dilemma shows that in a Nash equilibrium

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second -In Game 6 above,

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second -Suppose in Game 4 above that the players make their choices sequentially, with Player A choosing first. The Nash equilibrium in this game will be

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second -In Game 1 above,

In a simultaneous move game with two players,

Which of the following is most consistent with the concept of a Nash equilibrium?

In the following games, all payoffs are listed with the row player’s payoffs first and the column player’s payoffs second -In Game 3 above,

Player A and Player B are playing a prisoners' dilemma game. Which of the following statements is false?

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Preferences and the Concept of Utility

Consumer Choice

The Theory of Demand

Inputs and Production Functions

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets: Applications

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

Filters