Deck 19: Game Theory

Question 1

In a competitive business market,one company's strategy might be to minimize its potential losses.

Answer 1

True

Question 2

Game models are classified by the number of players,the maximum payoffs,and the likelihood of each outcome.

Answer 2

False

Question 3

Game theory is the study of

A)how optimal strategies are formulated in conflict.
B)decisions and their consequences.
C)pure probability.
D)conditional probability.
E)None of the above

Answer 3

A

Question 4

The minimax criterion is equivalent to maximizing one's minimum gains.

Question 5

The cornerstone of game theory is Harsanui equilibrium and Harsanui bargaining problems.

Question 6

In a competitive business market,one company's strategy might be to maximize its minimum profits.

Question 7

When there is no saddle point,the game is a mixed strategy game.

Question 8

The value of a two-person pure strategy game is equal to the lower value of the game.

Question 9

Game theory is not very useful during Union negotiations.

Question 10

Minimizing one's maximum losses is identical to maximizing one's minimum gains.

Question 11

Game theory is a way to consider the impact of games on business.

Question 12

Dominance increases the size of games by allowing additional strategies to be considered.

Question 13

Game theory has been used to plan warfare strategies.

Question 14

The minimax criterion is to

A)minimize one's maximum losses.
B)maximize one's maximum losses.
C)maximize one's minimum gains.
D)minimize one's minimum gains.
E)Both A and C are correct

Question 15

The upper value of the game is selected as the minimum of the maximum numbers in a column.

Question 16

The lower value of the game is selected as the maximum of the minimum numbers in a row.

Question 17

If the upper value of the game is larger than the lower value of the game,a saddle point condition exists.

Question 18

The saddle point in a payoff matrix is always the

A)largest number in its column and the largest number in its row.
B)largest number in its column and the smallest number in its row.
C)smallest number in its column and the largest number in its row.
D)smallest number in its column and the smallest number in its row.
E)None of the above

Question 19

Consider the following two-person game.The payoff for X is given in the table.X will always play strategy Y₁ Y₂
X₁ 4 6
X₂ 1 -3

A)X₁.
B)X₂.
C)Y₁.
D)Y₂.
E)Not enough information given

Question 20

In a zero-sum game,what one player gains is lost by the other.

Question 21

Given the following two-person game,what strategy should the players play?
Y₁ Y₂
X₁ 12 16
X₂ 14 8

Question 22

Given the following two-person game,what strategy should the players play?
Y₁ Y₂
X₁ 15 20
X₂ 8 4

Question 23

What is the value of the following two-person game?
Y₁ Y₂
X₁ 15 20
X₂ 8 4

Question 24

In a two-person,zero sum game,

A)the sum of losses equals zero.
B)the sum of gains equals zero.
C)the sum of losses for one player must equal the sum of gains for the other player.
D)None of the above

Question 25

Considering the following two-person game,what percentage of the time should X play strategy X₂? Y₁ Y₂
X₁ 6 3
X₂ 2 8

A)1/3
B)2/3
C)4/9
D)5/9
E)None of the above

Question 26

CleanClothes dry cleaners is opening a pick-up and delivery service.There is only one other dry cleaner that currently offers this service.To advertise,CleanClothes is considering either newspaper ads or attaching flyers to the doors of many local homes.The payoff for each of CleanClothes' potential strategies is given in the table below.What strategy will CleanClothes (X)play? Y₁ (newspaper ads)Y₂ (flyers)
X₁ (newspaper ads)52 37
X₂ (flyers)26 18

A)X₁
B)X₂
C)Y₁
D)Y₂
E)Not enough information given

Question 27

Bagles RUS is expanding into a high-growth suburban area.To promote business and lure customers from the competing Wer Bagel store,they are considering offering a free dozen bagels to the first 50 customers or radio advertisement.The payoff for Bagels RUS is given in the table below.What is Bagels RUS' (X)best strategy? Y₁ Y₂
X₁ 3 6
X₂ 2 -2

A)X₁
B)X₂
C)Y₁
D)Y₂
E)None of the above

Question 28

CleanClothes dry cleaners is opening a pick-up and delivery service.There is only one other dry cleaner that currently offers this service.To advertise,CleanClothes is considering either newspaper ads or attaching flyers to the doors of many local homes.The payoff for each of CleanClothes' potential strategies is given in the table below.What is the saddle point,if any,of this game? Y₁ (newspaper ads)Y₂ (flyers)
X₁ (newspaper ads)52 37
X₂ (flyers)26 18

A)37
B)17
C)16
D)8
E)There is no saddle point

Question 29

Consider the following two-person game,and determine the saddle point if it exists. Y₁ Y₂
X₁ 4 6
X₂ 2 -3

A)-3
B)2
C)4
D)6
E)There is no saddle point

Question 30

Bagles RUS is expanding into a high-growth suburban area.To promote business and lure customers from the competing Wer Bagel store,they are considering offering a free dozen bagels to the first 50 customers or radio advertisement.The payoff for Bagels RUS is given in the table below.What is the saddle point,if any,for the bagel stores? Y₁ Y₂
X₁ 3 6
X₂ 2 -2

A)3
B)6
C)2
D)-2
E)There is no saddle point

Question 31

Given the following two-person game,which strategy can be eliminated by use of dominance? Y₁ Y₂
X₁ 13 9
X₂ 6 8
X_{3 12 14}

A)X₁
B)X₂
C)X₃
D)Y₁
E)Y₂

Question 32

The value of the following game is 2.5.Therefore, Y₁ Y₂
X₁ 3 2
X₂ -1 6

A)X₁ will gain 2.5 points.
B)X₂ will gain 2.5 points.
C)X will gain 2.5 points.
D)Y will gain 2.5 points.
E)None of the above

Question 33

Considering the following two-person game,the value of the game (if played many times)is Y₁ Y₂
X₁ 6 3
X₂ 2 8

A)19.00.
B)4.75.
C)4.67.
D)Unable to be computed,as the α was not given.

Question 34

What is the value of the following two-person game?
Y₁ Y₂
X₁ 6 2
X₂ -4 7

Question 35

Bagles RUS is expanding into a high-growth suburban area.To promote business and lure customers from the competing Wer Bagel store,they are considering offering a free dozen bagels to the first 50 customers or radio advertisement.The payoff for Bagels RUS is given in the table below.What is Wer Bagels' (Y)best strategy? Y₁ Y₂
X₁ 3 6
X₂ 2 -2

A)X₁
B)X₂
C)Y₁
D)Y₂
E)None of the above

Question 36

Given the following two-person game,what strategy should the players play?
Y₁ Y₂
X₁ 6 2
X₂ -4 1

Question 37

The value of a mixed strategy game is

A)the maximum outcome of the game.
B)the minimum outcome of the game.
C)the outcome of the game played once.
D)the average outcome of the game played an infinite number of times.
E)None of the above

Question 38

If it is known what percentage of the time each player plays each strategy,then the value of a two-person game can be computed

A)from only the optimal strategy row.
B)from only the optimal strategy column.
C)from any column or row.
D)except for a zero sum game.
E)None of the above

Question 39

CleanClothes dry cleaners is opening a pick-up and delivery service.There is only one other dry cleaner that currently offers this service.To advertise,CleanClothes is considering either newspaper ads or attaching flyers to the doors of many local homes.The payoff for each of CleanClothes' potential strategies is given in the table below.What strategy will the existing dry cleaners (Y)play? Y₁ (newspaper ads)Y₂ (flyers)
X₁ (newspaper ads)52 37
X₂ (flyers)26 18

A)X₁
B)X₂
C)Y₁
D)Y₂
E)Not enough information given

Question 40

Considering the following two-person game,what percentage of the time should Y play strategy Y₁? Y₁ Y₂
X₁ 6 3
X₂ 2 8

A)1/3
B)2/3
C)4/9
D)5/9
E)None of the above

Question 41

The cornerstone of modern game theory includes the concepts developed by this person.

Question 42

Describe a two-person zero sum game.

Question 43

List at least two game theory applications.

Question 44

Explain the principle of dominance as used in game theory.

Question 45

What is meant by a mixed strategy game?

Question 46

What is meant by the value of a mixed strategy game?

Question 47

Given the following two-person game,what strategy should the players play?
Y₁ Y₂
X₁ 6 -2
X₂ -1 4