Deck 3: Key Strategic Tools

Question 1

For a player in a game, a dominant strategy is:

A)When a player adopts the same strategy, regardless as to the strategies of any other players in the game.
B)When a player chooses a given strategy most of the time.
C)The strategy that maximizes the joint payoff of players in the game.
D)All of the above.
E)None of the above.

Answer 1

When a player adopts the same strategy, regardless as to the strategies of any other players in the game.

Question 2

In a prisoners' dilemma:

A)Each player, acting irrationally, chooses a strategy that reduces total surplus.
B)Each player adopts a strategy with the aim of minimize the payoff of the other players.
C)Each player does not have a dominant strategy, but the sum of payoffs to all players are not maximized.
D)Each player has a dominant strategy and in the unique equilibrium joint payoffs of the players are not maximized.
E)None of the above.

Answer 2

Each player has a dominant strategy and in the unique equilibrium joint payoffs of the players are not maximized.

Question 3

A Nash equilibrium is:

A)When there is no unilateral profitable deviation for any player.
B)The strategy adopted by every player is optimal given the strategies adopted by every other player.
C)When all player's adopt their best response to the strategies of all other players in the game.
D)Players adopt strategies so that the total payoff to all players is maximized.
E)a, b, and C

Answer 3

a, b, and C

Question 4

Consider the following sequential game.Wally first chooses L or H.Having observed Wally's choice, Elizabeth chooses between A and F.The payoffs are as follows.If Wally chose L and Elizabeth chose A, the payoffs are 20 to Wally and 30 to Elizabeth.If Wally chose L and Elizabeth F, the payoffs are 25 to Wally and 40 and to Elizabeth.If Wally decides to opt for H and Elizabeth A, the payoffs are 30 and 20 to Wally and Elizabeth, respectively.Finally, if Wally opts for H and Elizabeth F, the payoffs are 20 to Wally and 50 to Elizabeth.What is the outcome in the subgame perfect equilibrium of this game?

A)(H, A)
B)(L, F)
C)(H, F)
D)(L, A)
E)(L, F) and (H, A)

Question 5

Consider the following game in which Sally can play T or B and John chooses between L or R.Each player makes their choice simultaneously.If Sally chooses T and John chooses L, Sally gets a payoff of 5 and John has a payoff of 4.If Sally plays T and John R, Sally's payoff is 8 and John gets 3.If Sally Chooses B and John L, the payoffs are 3 to Sally and 2 to John.Finally, if Sally chooses B and John R, the payoffs are 7 to Sally and 0 to John.What is the Nash equilibrium of the game?

A)(T, L)
B)(B, L)
C)(B, R)
D)(T, R) and (B, R)
E)None of the above.

Question 6

A subgame perfect equilibrium is when:

A)Every player's strategy is a Nash equilibrium in every subgame (part of the game).
B)Players adopt strategies to maximize the total payoff to players in the game.
C)Every player adopts a strategy that they would credible implement if they were ever required to.
D)a and C

Question 7

Consider the following sequential game.Wally first chooses L or H.Having observed Wally's choice, Elizabeth chooses between A and F.The payoffs are as follows.If Wally chose L and Elizabeth chose A, the payoffs are 30 to Wally and 20 to Elizabeth.If Wally chose L and Elizabeth F, the payoffs are 40 to Wally and 10 and to Elizabeth.If Wally decides to opt for H and Elizabeth A, the payoffs are 10 and 2 to Wally and Elizabeth, respectively.Finally, if Wally opts for H and Elizabeth F, the payoffs are 35 to Wally and 5 to Elizabeth.What is the outcome in the subgame perfect equilibrium of this game?

A)(L, F)
B)(H, A)
C)(H, F) and (L, F)
D)(L, A) and (H, F)
E)(H, F)

Question 8

Consider the following game in which Sally can play T or B and John chooses between L or R.Each player makes their choice simultaneously.If Sally chooses T and John chooses L, Sally gets a payoff of 3 and John has a payoff of 7.If Sally plays T and John R, Sally's payoff is 2 and John gets 1.If Sally Chooses B and John L, the payoffs are 1 to Sally and 2 to John.Finally, if Sally chooses B and John R, the payoffs are 4 to Sally and 3 to John.What is the Nash equilibria of the game?

A)(T, R)
B)(B,R)
C)(T,L) and (B,R)
D)(T,L)
E)None of the above.

Question 9

Consider the following game in which Sally can play T or B and John chooses between L or R.Each player makes their choice simultaneously.If Sally chooses T and John chooses L, Sally gets a payoff of 5 and John has a payoff of 4.If Sally plays T and John R, Sally's payoff is 8 and John gets 3.If Sally Chooses B and John L, the payoffs are 3 to Sally and 2 to John.Finally, if Sally chooses B and John R, the payoffs are 7 to Sally and 0 to John.Which statement is true?

A)The Nash equilibrium is (B,R); this is a prisoners' dilemma.
B)The Nash equilibrium is (T,R); this is a prisoners' dilemma.
C)The Nash equilibrium is (T,R); this is not dominant strategy equilibrium.
D)The Nash equilibrium is (T,L); this is a dominant strategy equilibrium.
E)None of the above.

Question 10

In a dominant strategy equilibrium:

A)The players adopt strategies that maximize the joint payoffs to all players in the game.
B)Each player adopts a strategy that maximizes the payoffs to all of the other players in the game.
C)Players adopt strategies that minimize the payoffs of their rivals.
D)Every player plays their dominant strategy.
E)None of the above.