Question 1

Generally,the analyst must make pairwise comparisons of the decision strategies in an attempt to identify dominated strategies.

Accepted Answer

A) True 
 B)False  True

Question 2

To select a strategy in a two-person,zero-sum game,Player A follows a ______ procedure and Player B follows a ______ procedure.

Accepted Answer

A) maximax,minimin 
B) maximax,minimax 
C) maximax,maximax 
D) maximin,minimax 
A) maximax,minimin 
B) maximax,minimax 
C) maximax,maximax 
D) maximin,minimax D

Question 3

For a game with an optimal pure strategy,which of the following statements is false?

Accepted Answer

A) The maximin equals the minimax. 
B) The value of the game cannot be improved by either player changing strategies. 
C) A saddle point exists. 
D) Dominated strategies cannot exist. 
A) The maximin equals the minimax. 
B) The value of the game cannot be improved by either player changing strategies. 
C) A saddle point exists. 
D) Dominated strategies cannot exist. D

Question 4

A dominated strategy will never be selected by the player.

Accepted Answer

A) True 
 B)False

Question 5

When the utility function for a risk-neutral decision maker is graphed (with monetary value on the horizontal axis and utility on the vertical axis),the function appears as

Accepted Answer

A) a straight line 
B) a convex curve 
C) a concave curve 
D) an 'S' curve 
A) a straight line 
B) a convex curve 
C) a concave curve 
D) an 'S' curve

Question 6

Determine decision strategies based on expected value and on expected utility for this decision tree.Use the utility function
 $$\begin{array} { c c } 
\text { Payoff } & \text { Indifference Probability } \
500 & 1.00 \
350 & .89 \
300 & .84 \
180 & .60 \
100 & .43 \
40 & .20 \
20 & .13 \
0 & 0
\end{array}$$

Accepted Answer

Let U(500)= 1 and U(0)= 0.Then
Based on

Question 7

Burger Prince Restaurant is considering the purchase of a $100,000 fire insurance policy.The fire statistics indicate that in a given year the probability of property damage in a fire is as follows:
 $$\begin{array} { l c c c c c c } 
\text { Fire Damage } & \$ 100,000 & \$ 75,000 & \$ 50,000 & \$ 25,000 & \$ 10,000 & \$ 0 \
\hline \text { Probability } & .006 & .002 & .004 & .003 & .005 & .980
\end{array}$$ 
a.If Burger Prince was risk neutral,how much would they be willing to pay for fire insurance?
b.If Burger Prince has the utility values given below,approximately how much would they be willing to pay for fire insurance?
 $$\begin{array} { l c c c c c c c } 
\text { Loss } & \$ 100,000 & \$ 75,000 & \$ 50,000 & \$ 25,000 & \$ 10,000 & \$ 5,000 & \$ 0 \
\hline \text { Utility } & 0 & 30 & 60 & 85 & 95 & 99 & 100
\end{array}$$

Accepted Answer

The answer of Burger Prince Restaurant is considering the purchase...

Question 8

A game has a pure strategy solution when both players' single-best strategies are the same.

Accepted Answer

A) True 
 B)False

Question 9

Expected utility is a particularly useful tool when payoffs stay in a range considered reasonable by the decision maker.

Accepted Answer

A) True 
 B)False

Question 10

A decision maker who is considered to be a risk taker is faced with this set of probabilities and payoffs
For the lottery p(80)+ (1 − p)(−50),this decision maker has assessed the following indifference probabilities
   Rank the decision alternatives on the basis of expected value and on the basis of expected utility.
 $$\begin{array} { r c } 
\text { Payoff } & \text { Probability } \
50 & .60 \
20 & .35 \
10 & .25 \
5 & .22 \
0 & .20 \
- 10 & .18 \
- 25 & .10
\end{array}$$

Accepted Answer

\[\begin{array} { l l l } 
\mathrm { EV

Question 11

If a game larger than 2 X 2 requires a mixed strategy,we attempt to reduce the size of the game by

Accepted Answer

A) identifying saddle points 
B) looking for dominated strategies 
C) inverting the payoff matrix 
D) eliminating negative payoffs 
A) identifying saddle points 
B) looking for dominated strategies 
C) inverting the payoff matrix 
D) eliminating negative payoffs

Question 12

If the maximin and minimax values are not equal in a two-person zero-sum game,

Accepted Answer

A) a mixed strategy is optimal. 
B) a pure strategy is optimal. 
C) a dominated strategy is optimal. 
D) one player should use a pure strategy and the other should use a mixed strategy. 
A) a mixed strategy is optimal. 
B) a pure strategy is optimal. 
C) a dominated strategy is optimal. 
D) one player should use a pure strategy and the other should use a mixed strategy.

Question 13

Draw the utility curves for three types of decision makers,label carefully,and explain the concepts of increasing and decreasing marginal returns for money.​

Accepted Answer

Sure, I can help with that.

First, let

Question 14

When and why should a utility approach be followed?​

Accepted Answer

A utility approach should be followed wh

Question 15

The decision alternative with the best expected monetary value will always be the most desirable decision.

Accepted Answer

A) True 
 B)False

Question 16

If it is optimal for both players in a two-person,zero-sum game to select one strategy and stay with that strategy regardless of what the other player does,the game

Accepted Answer

A) has more than one equilibrium point. 
B) will have alternating winners. 
C) will have no winner. 
D) has a pure strategy solution. 
A) has more than one equilibrium point. 
B) will have alternating winners. 
C) will have no winner. 
D) has a pure strategy solution.

Question 17

With a mixed strategy,the optimal solution for each player is to randomly select among two or more of the alternative strategies.

Accepted Answer

A) True 
 B)False

Question 18

To assign utilities,consider the best and worst payoffs in the entire decision situation.

Accepted Answer

A) True 
 B)False

Question 19

The utility function for a risk avoider typically shows a diminishing marginal return for money.

Accepted Answer

A) True 
 B)False

Question 20

A decision maker has chosen .4 as the probability for which he cannot choose between a certain loss of 10,000 and the lottery p(−25000)+ (1 − p)(5000).If the utility of −25,000 is 0 and of 5000 is 1,then the utility of −10,000 is

Accepted Answer

A) .5 
B) .6 
C) .4 
D) 4 
A) .5 
B) .6 
C) .4 
D) 4

Generally,the analyst must make pairwise comparisons of the decision strategies in an attempt to identify dominated strategies.

To select a strategy in a two-person,zero-sum game,Player A follows a procedure and Player B follows a procedure.

For a game with an optimal pure strategy,which of the following statements is false?

A dominated strategy will never be selected by the player.

When the utility function for a risk-neutral decision maker is graphed (with monetary value on the horizontal axis and utility on the vertical axis),the function appears as

A game has a pure strategy solution when both players' single-best strategies are the same.

Expected utility is a particularly useful tool when payoffs stay in a range considered reasonable by the decision maker.

If a game larger than 2 X 2 requires a mixed strategy,we attempt to reduce the size of the game by

If the maximin and minimax values are not equal in a two-person zero-sum game,

Draw the utility curves for three types of decision makers,label carefully,and explain the concepts of increasing and decreasing marginal returns for money.

When and why should a utility approach be followed?

The decision alternative with the best expected monetary value will always be the most desirable decision.

If it is optimal for both players in a two-person,zero-sum game to select one strategy and stay with that strategy regardless of what the other player does,the game

With a mixed strategy,the optimal solution for each player is to randomly select among two or more of the alternative strategies.

To assign utilities,consider the best and worst payoffs in the entire decision situation.

The utility function for a risk avoider typically shows a diminishing marginal return for money.

A decision maker has chosen .4 as the probability for which he cannot choose between a certain loss of 10,000 and the lottery p(−25000)+ (1 − p)(5000).If the utility of −25,000 is 0 and of 5000 is 1,then the utility of −10,000 is

Introduction

Introduction to Probability

Probability Distributions

Decision Analysis

Time Series Analysis Forecasting

Intro to Linear Programming

LP Sensitivity Analysis

LP Applications

Distribution Network Models

Integer Linear Programming

Advanced Optimization Applications

Project Scheduling

Inventory Models

Waiting Line Models

Simulation

Markov Processes

Filters

Exam 5: Utility Game Theory

Generally,the analyst must make pairwise comparisons of the decision strategies in an attempt to identify dominated strategies.

To select a strategy in a two-person,zero-sum game,Player A follows a ______ procedure and Player B follows a ______ procedure.

For a game with an optimal pure strategy,which of the following statements is false?

A dominated strategy will never be selected by the player.

When the utility function for a risk-neutral decision maker is graphed (with monetary value on the horizontal axis and utility on the vertical axis),the function appears as

Determine decision strategies based on expected value and on expected utility for this decision tree.Use the utility function Payoff Indifference Probability 500 1.00 350 .89 300 .84 180 .60 100 .43 40 .20 20 .13 0 0

A game has a pure strategy solution when both players' single-best strategies are the same.

Expected utility is a particularly useful tool when payoffs stay in a range considered reasonable by the decision maker.

If a game larger than 2 X 2 requires a mixed strategy,we attempt to reduce the size of the game by

If the maximin and minimax values are not equal in a two-person zero-sum game,

Draw the utility curves for three types of decision makers,label carefully,and explain the concepts of increasing and decreasing marginal returns for money.​

When and why should a utility approach be followed?​

The decision alternative with the best expected monetary value will always be the most desirable decision.

If it is optimal for both players in a two-person,zero-sum game to select one strategy and stay with that strategy regardless of what the other player does,the game

With a mixed strategy,the optimal solution for each player is to randomly select among two or more of the alternative strategies.

To assign utilities,consider the best and worst payoffs in the entire decision situation.

The utility function for a risk avoider typically shows a diminishing marginal return for money.

A decision maker has chosen .4 as the probability for which he cannot choose between a certain loss of 10,000 and the lottery p(−25000)+ (1 − p)(5000).If the utility of −25,000 is 0 and of 5000 is 1,then the utility of −10,000 is

Introduction

Introduction to Probability

Probability Distributions

Decision Analysis

Time Series Analysis Forecasting

Intro to Linear Programming

LP Sensitivity Analysis

LP Applications

Distribution Network Models

Integer Linear Programming

Advanced Optimization Applications

Project Scheduling

Inventory Models

Waiting Line Models

Simulation

Markov Processes

Filters

To select a strategy in a two-person,zero-sum game,Player A follows a procedure and Player B follows a procedure.

Draw the utility curves for three types of decision makers,label carefully,and explain the concepts of increasing and decreasing marginal returns for money.

When and why should a utility approach be followed?