Exam 14: Game Theory and the Economics of Information

Consider two commodities,a refrigerator worth $1,500 and a food processor worth $100.For which of these commodities will a consumer want to bear a higher search cost and why?

Mia has been awarded a penalty kick.China's goalie has two possible strategies,to dive left or dive right.Mia can shoot left or shoot right.There is no time for the goalie to determine where the ball is going before she must commit herself to diving left or right.Suppose that the goalie always stops the shot if Mia shoots right and the goalie dives left.On the other hand,Mia always scores if she shoots right uncontested.Mia is not as adept at shooting to the left.When Mia kicks left the goalie stops the shot 75 percent of the time if she dives right,and Mia misses the open goal half the time when shooting left. a)Summarize this game in a payoff matrix. b)Does either player have a dominant strategy? Explain. c)What is the Nash equilibrium? Explain.

Which of the following is not true of advertising?

Which of the following statements is true of Nash equilibrium?

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. If X = 15 and Y = 10,then the information in Table 14-3 implies that the game has:

The "live and let live" policy was followed by the soldiers in the trenches during World War I despite the passions of battle and the military logic of "kill or be killed".The cooperative equilibrium that emerged among the rivals in this situation is an example of:

For which of the following commodities will the benefit from search be the highest?

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

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?

Health insurance companies often place limitations on the services covered by the insurance to deal with the:

Consider a duopoly market where the players agree to collude.The single-period prisoner's dilemma game applied to this market generally predicts that:

Which of the following is a defining characteristic of a prisoner's dilemma game?

In economics,the term "lemon" is used to describe:

A Nash equilibrium occurs when:

A prisoner's dilemma game is one in which:

Firms that produce and sell technologically advanced products in a market make additional efforts to develop a good reputation and a brand name.This is because:

The three most common elements in game theory models are:

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

In an oligopoly game,the possibility of cheating by one of the players:

Use the following table to answer the question : Table 14-4 : 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. -Which of the following can be concluded from the information given in Table 14-4?