Deck 13: Strategic Games

Question 1

Use the following case from questions
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​
​In a sequential game,if Irene decides to enter the market,what would be Mattie's best response?

A)​Accommodate
B)Fight
C)Run away
D)​Shut down

Answer 1

A

Question 2

​Use the following case from questions
Two siblings,Sarah and Tom are playing a simultaneous hit and tell game.Sarah can hit Tom or not and Tom can tattle on Sarah or not.Relative to no hitting and no tattling,if Sarah hits Tom,and he tattles they both experience a loss of 10.Not telling,gets Tom a bruise,a loss of 5 but Sarah gains 5.If he tattles untruthfully,he gets a gain of 5 and Sarah loses 5.If they get along,no one gets anything
​If Tom tattles,what would Sarah's best response be

A)​Hit
B)Not hit
C)Run
D)​Hide

Answer 2

B

Question 3

Use the following case from questions
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​
​If Mattie's threatens to always fight,what would Irene's best response be?

A)​Enter
B)Not enter
C)Run
D)​All of the above

Answer 3

B

Question 4

​Use the following case from questions
Two siblings,Bratty Brad and Mousey Mike are playing a simultaneous hit and tell game.Bratty Brad can hit Mousey Mike or not and Mousey Mike can tattle on Bratty Brad or not.Relative to no hitting and no tattling,if Bratty Brad hits Mousey Mike,and he tattles they both experience a loss of 10.Not telling,gets Mousey Mike a bruise,a loss of 5 but Bratty Brad gains 5.If he tattles untruthfully,Mousey Mike gets a gain of 5 and Bratty Brad loses 5.If they get along,no one gets anything
​If Bratty Brad decides not to hit Mousey Mike,what would Mousey Mike's best response be?

A)​Tell
B)Not tell
C)Run
D)​Hide

Question 5

Use the following case from questions
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​
​If Mattie wants to discourage Irene from entering the market,what strategy should she follow?

A)​Threaten to always accommodate
B)Always accommodate
C)Threaten to always fight
D)​All of the above

Question 6

​Use the following case from questions
Two siblings,Bratty Brad and Mousey Mike are playing a simultaneous hit and tell game.Bratty Brad can hit Mousey Mike or not and Mousey Mike can tattle on Bratty Brad or not.Relative to no hitting and no tattling,if Bratty Brad hits Mousey Mike,and he tattles they both experience a loss of 10.Not telling,gets Mousey Mike a bruise,a loss of 5 but Bratty Brad gains 5.If he tattles untruthfully,Mousey Mike gets a gain of 5 and Bratty Brad loses 5.If they get along,no one gets anything
​If Mousey Mike tattles,what would Bratty Brad's best response be

A)​Hit
B)Not hit
C)Run
D)​Hide

Question 7

Use the following case from questions
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​
​What would be the profits for Irene's Dairy in equilibrium?

A)​5 million loss
B)5 million
C)10 million
D)​20 million

Question 8

​Use the following case from questions
Two siblings,Sarah and Tom are playing a simultaneous hit and tell game.Sarah can hit Tom or not and Tom can tattle on Sarah or not.Relative to no hitting and no tattling,if Sarah hits Tom,and he tattles they both experience a loss of 10.Not telling,gets Tom a bruise,a loss of 5 but Sarah gains 5.If he tattles untruthfully,he gets a gain of 5 and Sarah loses 5.If they get along,no one gets anything
If Sarah decides to hit Tom,what would Tom's best response be​

A)​Tell
B)Not tell
C)Run
D)​Hide

Question 9

​Use the following case from questions
Two siblings,Sarah and Tom are playing a simultaneous hit and tell game.Sarah can hit Tom or not and Tom can tattle on Sarah or not.Relative to no hitting and no tattling,if Sarah hits Tom,and he tattles they both experience a loss of 10.Not telling,gets Tom a bruise,a loss of 5 but Sarah gains 5.If he tattles untruthfully,he gets a gain of 5 and Sarah loses 5.If they get along,no one gets anything
​What would be the Nash equilibrium of this simultaneous game?

A)​Hit,Tell
B)Not hit,Tell
C)Hit,Not tell
D)​Both B&C

Question 10

​Use the following case from questions
Two siblings,Sarah and Tom are playing a simultaneous hit and tell game.Sarah can hit Tom or not and Tom can tattle on Sarah or not.Relative to no hitting and no tattling,if Sarah hits Tom,and he tattles they both experience a loss of 10.Not telling,gets Tom a bruise,a loss of 5 but Sarah gains 5.If he tattles untruthfully,he gets a gain of 5 and Sarah loses 5.If they get along,no one gets anything
​If Tom wants to not be hit,what strategy could he follow

A)​Threaten to not tell
B)Always not tell
C)Threaten to tell
D)​All of the above

Question 11

In sequential games,

A)​Players take turns and observe their rivals choices before they make their choices
B)Players take turns but don't observe their rivals choices before they make their choices
C)Players move at the same time
D)​None of the above

Question 12

Use the following case from questions
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​
​What would the profits be for Mattie's Dairy if Irene does not enter the market?

A)​5million
B)10million
C)15million
D)​Zero

Question 13

​Use the following case from questions
Two siblings,Sarah and Tom are playing a simultaneous hit and tell game.Sarah can hit Tom or not and Tom can tattle on Sarah or not.Relative to no hitting and no tattling,if Sarah hits Tom,and he tattles they both experience a loss of 10.Not telling,gets Tom a bruise,a loss of 5 but Sarah gains 5.If he tattles untruthfully,he gets a gain of 5 and Sarah loses 5.If they get along,no one gets anything
​If Sarah decides not to hit Tom,what would Tom's best response be

A)​Tell
B)Not tell
C)Run
D)​Hide

Question 14

​Use the following case from questions
Two siblings,Sarah and Tom are playing a simultaneous hit and tell game.Sarah can hit Tom or not and Tom can tattle on Sarah or not.Relative to no hitting and no tattling,if Sarah hits Tom,and he tattles they both experience a loss of 10.Not telling,gets Tom a bruise,a loss of 5 but Sarah gains 5.If he tattles untruthfully,he gets a gain of 5 and Sarah loses 5.If they get along,no one gets anything
​If Tom does not tattle,what would Sarah's best response be

A)​Hit
B)Not hit
C)Run
D)​Hide

Question 15

Use the following case from questions
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​
What would be the profits for Mattie's Dairy in equilibrium if Irene does enter the market?​

A)​5 million loss
B)5 million
C)10 million
D)​20 million

Question 16

Use the following case from questions
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​
​What would the Nash equilibrium be in this sequential game?

A)​Enter,fight
B)Enter,Accommodate
C)Do not enter,Fight
D)​Do not enter,Accommodate

Question 17

​Use the following case from questions
Two siblings,Bratty Brad and Mousey Mike are playing a simultaneous hit and tell game.Bratty Brad can hit Mousey Mike or not and Mousey Mike can tattle on Bratty Brad or not.Relative to no hitting and no tattling,if Bratty Brad hits Mousey Mike,and he tattles they both experience a loss of 10.Not telling,gets Mousey Mike a bruise,a loss of 5 but Bratty Brad gains 5.If he tattles untruthfully,Mousey Mike gets a gain of 5 and Bratty Brad loses 5.If they get along,no one gets anything
​If Bratty Brad decides to hit Mousey Mike,what would Mousey Mike's best response be

A)​Tell
B)Not tell
C)Run
D)​Hide

Question 18

Use the following case from questions
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​
​Given that Mattie could convincingly threatens to always fight,what would be Irene's best response

A)​Enter
B)Not Enter
C)Run
D)​Hide

Question 19

Use the following case from questions
Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​
​In a sequential game,given Mattie's best response function,what would Irene's best response be?

A)​Not enter the market
B)Enter the market
C)Fight
D)​Run away

Question 20

​Use the following case from questions
Two siblings,Sarah and Tom are playing a simultaneous hit and tell game.Sarah can hit Tom or not and Tom can tattle on Sarah or not.Relative to no hitting and no tattling,if Sarah hits Tom,and he tattles they both experience a loss of 10.Not telling,gets Tom a bruise,a loss of 5 but Sarah gains 5.If he tattles untruthfully,he gets a gain of 5 and Sarah loses 5.If they get along,no one gets anything
​If Tom threatens to tell,what would Sarah's best response be?

A)​Hit
B)Not hit
C)Run
D)​Hide

Question 21

​Use the following case from questions
Two siblings,Bratty Brad and Mousey Mike are playing a simultaneous hit and tell game.Bratty Brad can hit Mousey Mike or not and Mousey Mike can tattle on Bratty Brad or not.Relative to no hitting and no tattling,if Bratty Brad hits Mousey Mike,and he tattles they both experience a loss of 10.Not telling,gets Mousey Mike a bruise,a loss of 5 but Bratty Brad gains 5.If he tattles untruthfully,Mousey Mike gets a gain of 5 and Bratty Brad loses 5.If they get along,no one gets anything
​If Mousey Mike threatens to tell,what would Bratty Brad's best response be?

A)​Hit
B)Not hit
C)Run
D)​Hide

Question 22

​Use the following case from questions
Two siblings,Bratty Brenda and Tattling Tina are playing a simultaneous hit and tell game.Bratty Brenda can hit Tattling Tina or not and Tattling Tina can tattle on Bratty Brenda or not.Relative to no hitting and no tattling,if Bratty Brenda hits Tattling Tina,and she tattles they both experience a loss of 10.Not telling,gets Tattling Tina a bruise,a loss of 5 but Bratty Brenda gains 5.If she tattles untruthfully,Tattling Tina gets a gain of 5 and Bratty Brenda loses 5.If they get along,no one gets anything
​What would be the Nash equilibrium of this simultaneous game?

A)​Hit,Tell
B)Not hit,Tell
C)Hit,Not tell
D)​Both B&C

Question 23

​Use the following case from questions
Two siblings,Bratty Brenda and Tattling Tina are playing a simultaneous hit and tell game.Bratty Brenda can hit Tattling Tina or not and Tattling Tina can tattle on Bratty Brenda or not.Relative to no hitting and no tattling,if Bratty Brenda hits Tattling Tina,and she tattles they both experience a loss of 10.Not telling,gets Tattling Tina a bruise,a loss of 5 but Bratty Brenda gains 5.If she tattles untruthfully,Tattling Tina gets a gain of 5 and Bratty Brenda loses 5.If they get along,no one gets anything
​If Tattling Tina tattles,what would Bratty Brenda's best response be

A)​Hit
B)Not hit
C)Run
D)​Hide

Question 24

​Use the following case from questions
A couple gets into an argument deciding where they would go out together.Both like to spend like with each other and have the payoffs as below

​If Sally decides to go to the boxing match,what is Sam's best response

A)​Go to the ballet
B)Go to the boxing match
C)Run away
D)​Hide

Question 25

​Use the following case from questions
Two street racers are playing a simultaneous game of chicken.They have to race towards each other and whoever swerves first is chicken and faces shame,a loss of 8,while the winner enjoys a gain of 3.If neither stop,they would crash into each other,a loss of 10.If both of them swerve at the same time,they are both chicken and face a loss of 5 each
​What would the Nash equilibrium be in this game?

A)​Neither of the players would stop
B)Both of the players would stop
C)Player A stops
D)​Player B stops

Question 26

​Use the following case from questions
Two siblings,Bratty Brenda and Tattling Tina are playing a simultaneous hit and tell game.Bratty Brenda can hit Tattling Tina or not and Tattling Tina can tattle on Bratty Brenda or not.Relative to no hitting and no tattling,if Bratty Brenda hits Tattling Tina,and she tattles they both experience a loss of 10.Not telling,gets Tattling Tina a bruise,a loss of 5 but Bratty Brenda gains 5.If she tattles untruthfully,Tattling Tina gets a gain of 5 and Bratty Brenda loses 5.If they get along,no one gets anything
​If Tattling Tina threatens to tell,what would Bratty Brenda's best response be?

A)​Hit
B)Not hit
C)Run
D)​Hide

Question 27

​Use the following case from questions
Two siblings,Bratty Brenda and Tattling Tina are playing a simultaneous hit and tell game.Bratty Brenda can hit Tattling Tina or not and Tattling Tina can tattle on Bratty Brenda or not.Relative to no hitting and no tattling,if Bratty Brenda hits Tattling Tina,and she tattles they both experience a loss of 10.Not telling,gets Tattling Tina a bruise,a loss of 5 but Bratty Brenda gains 5.If she tattles untruthfully,Tattling Tina gets a gain of 5 and Bratty Brenda loses 5.If they get along,no one gets anything
​If Bratty Brenda decides not to hit Tattling Tina,what would Tattling Tina's best response be?

A)​Tell
B)Not tell
C)Run
D)​Hide

Question 28

​Use the following case from questions
Two siblings,Bratty Brenda and Tattling Tina are playing a simultaneous hit and tell game.Bratty Brenda can hit Tattling Tina or not and Tattling Tina can tattle on Bratty Brenda or not.Relative to no hitting and no tattling,if Bratty Brenda hits Tattling Tina,and she tattles they both experience a loss of 10.Not telling,gets Tattling Tina a bruise,a loss of 5 but Bratty Brenda gains 5.If she tattles untruthfully,Tattling Tina gets a gain of 5 and Bratty Brenda loses 5.If they get along,no one gets anything
​If Bratty Brenda decides to hit Tattling Tina,what would Tattling Tina's best response be

A)​Tell
B)Not tell
C)Run
D)​Hide

Question 29

​Use the following case from questions
Two siblings,Bratty Brenda and Tattling Tina are playing a simultaneous hit and tell game.Bratty Brenda can hit Tattling Tina or not and Tattling Tina can tattle on Bratty Brenda or not.Relative to no hitting and no tattling,if Bratty Brenda hits Tattling Tina,and she tattles they both experience a loss of 10.Not telling,gets Tattling Tina a bruise,a loss of 5 but Bratty Brenda gains 5.If she tattles untruthfully,Tattling Tina gets a gain of 5 and Bratty Brenda loses 5.If they get along,no one gets anything
​If Tattling Tina wants to not be hit,what strategy could she follow

A)​Threaten to not tell
B)Always not tell
C)Threaten to tell
D)​All of the above

Question 30

​Use the following case from questions
Two siblings,Bratty Brenda and Tattling Tina are playing a simultaneous hit and tell game.Bratty Brenda can hit Tattling Tina or not and Tattling Tina can tattle on Bratty Brenda or not.Relative to no hitting and no tattling,if Bratty Brenda hits Tattling Tina,and she tattles they both experience a loss of 10.Not telling,gets Tattling Tina a bruise,a loss of 5 but Bratty Brenda gains 5.If she tattles untruthfully,Tattling Tina gets a gain of 5 and Bratty Brenda loses 5.If they get along,no one gets anything
​If Tattling Tina does not tattle,what would Bratty Brenda's best response be

A)​Hit
B)Not hit
C)Run
D)​Hide

Question 31

​Use the following case from questions
Two street racers are playing a simultaneous game of chicken.They have to race towards each other and whoever swerves first is chicken and faces shame,a loss of 8,while the winner enjoys a gain of 3.If neither stop,they would crash into each other,a loss of 10.If both of them swerve at the same time,they are both chicken and face a loss of 5 each
​If player B destroys his own brakes before the race,and player A sees that ,what would the new Nash equilibrium be in this case?

A)​Player A stops,Player B does not
B)Player B stops,Player A does not
C)Both players stop
D)​Neither players stop

Question 32

​Use the following case from questions
A shoplifter and a security guard are playing a simultaneous game.If the shoplifter steals and the security guard is vigilant,the shoplifter gets caught she suffers a loss of 20,and the security guard gets a bonus worth 15.If the shoplifter steals and the security guard is not vigilant,she does not get caught and gains 15 and the guard loses 5.If the shoplifter does not steal and the guard is vigilant,the guard loses 3 for the effort,while the shoplifter gains nothing and if the shoplifter does not steal and the guard is not vigilant,neither gain anything
​If the shoplifter knows that the security guard has a reputation of always being vigilant,what is his best response?

A)​Steal
B)Not steal
C)Run
D)​Hide

Question 33

​Use the following case from questions
A couple gets into an argument deciding where they would go out together.Both like to spend like with each other and have the payoffs as below

​What would be the Nash equilibrium of this simultaneous game?

A)​Boxing,boxing
B)Ballet,ballet
C)Boxing,ballet
D)​Both A&B

Question 34

​Use the following case from questions
A couple gets into an argument deciding where they would go out together.Both like to spend like with each other and have the payoffs as below

​If the boxing match will be the "fight of the century" which has dramatically increased Sally's payoffs for going to the fights,even without Sam,and Sam knows that,what would the Nash equilibrium be now?

A)​Boxing,boxing
B)Ballet,ballet
C)Ballet,boxing
D)​Boxing,boxing

Question 35

​Use the following case from questions
Two street racers are playing a simultaneous game of chicken.They have to race towards each other and whoever swerves first is chicken and faces shame,a loss of 8,while the winner enjoys a gain of 3.If neither stop,they would crash into each other,a loss of 10.If both of them swerve at the same time,they are both chicken and face a loss of 5 each
​If player B destroys his own brakes before the race,and player A sees that,what is player A's best response

A)​Stop
B)Not stop
C)Crash into player B
D)​All of the above

Question 36

​Use the following case from questions
Two street racers are playing a simultaneous game of chicken.They have to race towards each other and whoever swerves first is chicken and faces shame,a loss of 8,while the winner enjoys a gain of 3.If neither stop,they would crash into each other,a loss of 10.If both of them swerve at the same time,they are both chicken and face a loss of 5 each
​What would the B's best response be if player A does not stop?

A)​Player A stops,Player B does not
B)Player B stops,Player A does not
C)Both players stop
D)​Neither players stop

Question 37

​Use the following case from questions
A shoplifter and a security guard are playing a simultaneous game.If the shoplifter steals and the security guard is vigilant,the shoplifter gets caught she suffers a loss of 20,and the security guard gets a bonus worth 15.If the shoplifter steals and the security guard is not vigilant,she does not get caught and gains 15 and the guard loses 5.If the shoplifter does not steal and the guard is vigilant,the guard loses 3 for the effort,while the shoplifter gains nothing and if the shoplifter does not steal and the guard is not vigilant,neither gain anything
​What is the Nash equilibrium of this simultaneous game?

A)​Steal,Vigilant
B)Steal,Not vigilant
C)Not steal,Vigilant
D)​The game has no Nash equilibrium

Question 38

​Use the following case from questions
Two siblings,Bratty Brad and Mousey Mike are playing a simultaneous hit and tell game.Bratty Brad can hit Mousey Mike or not and Mousey Mike can tattle on Bratty Brad or not.Relative to no hitting and no tattling,if Bratty Brad hits Mousey Mike,and he tattles they both experience a loss of 10.Not telling,gets Mousey Mike a bruise,a loss of 5 but Bratty Brad gains 5.If he tattles untruthfully,Mousey Mike gets a gain of 5 and Bratty Brad loses 5.If they get along,no one gets anything
​If Mousey Mike wants to not be hit,what strategy could he follow

A)​Threaten to not tell
B)Always not tell
C)Threaten to tell
D)​All of the above

Question 39

​Use the following case from questions
Two siblings,Bratty Brad and Mousey Mike are playing a simultaneous hit and tell game.Bratty Brad can hit Mousey Mike or not and Mousey Mike can tattle on Bratty Brad or not.Relative to no hitting and no tattling,if Bratty Brad hits Mousey Mike,and he tattles they both experience a loss of 10.Not telling,gets Mousey Mike a bruise,a loss of 5 but Bratty Brad gains 5.If he tattles untruthfully,Mousey Mike gets a gain of 5 and Bratty Brad loses 5.If they get along,no one gets anything
​What would be the Nash equilibrium of this simultaneous game?

A)​Hit,Tell
B)Not hit,Tell
C)Hit,Not tell
D)​Both B&C

Question 40

​Use the following case from questions
Two siblings,Bratty Brad and Mousey Mike are playing a simultaneous hit and tell game.Bratty Brad can hit Mousey Mike or not and Mousey Mike can tattle on Bratty Brad or not.Relative to no hitting and no tattling,if Bratty Brad hits Mousey Mike,and he tattles they both experience a loss of 10.Not telling,gets Mousey Mike a bruise,a loss of 5 but Bratty Brad gains 5.If he tattles untruthfully,Mousey Mike gets a gain of 5 and Bratty Brad loses 5.If they get along,no one gets anything
​If Mousey Mike does not tattle,what would Bratty Brad's best response be

A)​Hit
B)Not hit
C)Run
D)​Hide

Question 41

​Use the following case from questions
Two roommates John and Joe are playing a simultaneous game of cleaning the apartment.If neither of them clean,the apartment gets filthy and both get a utility of 2.If John cleans and Joe doesn't,John gets a utility of 1 and Joe gets a utility of 4.If Joe cleans and John doesn't,Joe gets a utility of 1 and John gets a utility of 4 and if both clean up the apartment,they each get a utility of 3.
​If the roommates played the game repeatedly where one roommate not cleaning this time would trigger the other roommate not cleaning next time,the Nash equilibrium is most likely to be

A)​John cleans,Joe doesn't
B)Joe cleans,John doesn't
C)Both of them clean
D)​Neither of them clean

Question 42

​Which one of the following is a way to get out of a repeated Prisoner's Dilemma Nash Equilibrium?

A)​Do not be provoked
B)Do not be easily provoked
C)Be easily provoked
D)​All of the above

Question 43

​Use the following case from questions
Two ice cream trucks A&B are playing a simultaneous pricing game.If one of them prices low,he gets all the customers,a payoff of 12,while other gets zero.If both price high they each get a payoff of 6 and if both price low,they get a payoff of 5.
​If the game is repeated indefinitely,and the vendors adopt a trigger strategy such that they would start charging the low price only if the other vendor charged a low price last time,what would be the Nash equilibrium?

A)​Both the vendors price high
B)Both the vendors price low
C)Vendor A prices high,vendor B prices low
D)​Vendor B prices high,vendor A prices low

Question 44

​Use the following case from questions
Two roommates John and Joe are playing a simultaneous game of cleaning the apartment.If neither of them clean,the apartment gets filthy and both get a utility of 2.If John cleans and Joe doesn't,John gets a utility of 1 and Joe gets a utility of 4.If Joe cleans and John doesn't,Joe gets a utility of 1 and John gets a utility of 4 and if both clean up the apartment,they each get a utility of 3.
​Is the equilibrium efficient?

A)​Yes,since they are both maximizing the utility
B)No,since they could both get more utility
C)One should keep the house clean
D)​None of the above

Question 45

​Use the following case from questions
A shoplifter and a security guard are playing a simultaneous game.If the shoplifter steals and the security guard is vigilant,the shoplifter gets caught she suffers a loss of 20,and the security guard gets a bonus worth 15.If the shoplifter steals and the security guard is not vigilant,she does not get caught and gains 15 and the guard loses 5.If the shoplifter does not steal and the guard is vigilant,the guard loses 3 for the effort,while the shoplifter gains nothing and if the shoplifter does not steal and the guard is not vigilant,neither gain anything
​If the simultaneous game is instead changed into a sequential game where the shoplifter can see whether the security guard is vigilant or not before deciding to steal.What is the Nash equilibrium of the game?

A)​Steal,Vigilant
B)Steal,Not vigilant
C)Not steal,Vigilant
D)​Not steal,Not vigilant

Question 46

​Use the following case from questions
Two ice cream trucks A&B are playing a simultaneous pricing game.If one of them prices low,he gets all the customers,a payoff of 12,while other gets zero.If both price high they each get a payoff of 6 and if both price low,they get a payoff of 5.
​Does the Nash equilibrium yield maximum profit?

A)​Yes,because they are each getting the maximum payoff
B)No,because they could do better by pricing high
C)Yes,because they are both making sales
D)​No,because they both hate selling ice cream

Question 47

​Use the following case from questions
A shoplifter and a security guard are playing a simultaneous game.If the shoplifter steals and the security guard is vigilant,the shoplifter gets caught she suffers a loss of 20,and the security guard gets a bonus worth 15.If the shoplifter steals and the security guard is not vigilant,she does not get caught and gains 15 and the guard loses 5.If the shoplifter does not steal and the guard is vigilant,the guard loses 3 for the effort,while the shoplifter gains nothing and if the shoplifter does not steal and the guard is not vigilant,neither gain anything
​If the shoplifter knows that the security guard has a reputation for sleeping on the job,what would his best response be

A)​Steal
B)Not steal
C)Run
D)​Hide

Question 48

​Use the following case from questions
A shoplifter and a security guard are playing a simultaneous game.If the shoplifter steals and the security guard is vigilant,the shoplifter gets caught she suffers a loss of 20,and the security guard gets a bonus worth 15.If the shoplifter steals and the security guard is not vigilant,she does not get caught and gains 15 and the guard loses 5.If the shoplifter does not steal and the guard is vigilant,the guard loses 3 for the effort,while the shoplifter gains nothing and if the shoplifter does not steal and the guard is not vigilant,neither gain anything
​If the security guard is somehow certain that the shoplifter would not steal,his best response would be

A)​Being watchful
B)Sleeping on the job
C)Run
D)​Hide

Question 49

​The Nash equilibrium was named after

A)​Tom Nash
B)John Nash
C)Robert Nash
D)​Kelvin Nash

Question 50

​Use the following case from questions
Two ice cream trucks A&B are playing a simultaneous pricing game.If one of them prices low,he gets all the customers,a payoff of 12,while other gets zero.If both price high they each get a payoff of 6 and if both price low,they get a payoff of 5.
​What is the Nash equilibrium of this game?

A)​Both the vendors price high
B)Both the vendors price low
C)Vendor A prices high,vendor B prices low
D)​Vendor B prices high,vendor A prices low

Question 51

​Use the following case from questions
Two ice cream trucks A&B are playing a simultaneous pricing game.If one of them prices low,he gets all the customers,a payoff of 12,while other gets zero.If both price high they each get a payoff of 6 and if both price low,they get a payoff of 5.
​What is the best response of Vendor B to Vendor A pricing high?

A)​Also price high
B)Price low
C)Leave the market
D)​All of the above

Question 52

​Use the following case from questions
Two roommates John and Joe are playing a simultaneous game of cleaning the apartment.If neither of them clean,the apartment gets filthy and both get a utility of 2.If John cleans and Joe doesn't,John gets a utility of 1 and Joe gets a utility of 4.If Joe cleans and John doesn't,Joe gets a utility of 1 and John gets a utility of 4 and if both clean up the apartment,they each get a utility of 3.
​What is the Nash equilibrium of this game?

A)​Both of them clean the apartment
B)John cleans,Joe doesn't
C)Joe cleans,John doesn't
D)​Neither of them clean the apartment

Question 53

​Use the following case from questions
Two roommates John and Joe are playing a simultaneous game of cleaning the apartment.If neither of them clean,the apartment gets filthy and both get a utility of 2.If John cleans and Joe doesn't,John gets a utility of 1 and Joe gets a utility of 4.If Joe cleans and John doesn't,Joe gets a utility of 1 and John gets a utility of 4 and if both clean up the apartment,they each get a utility of 3.
​If the apartment owner can somehow see the effort of the each of the room mates and punishes with a loss of 5 to any room mate who doesn't clean,is that likely to lead to a more efficient outcome?

A)​No because they would have to clean against their will
B)Yes because now they would both get a utility of 3
C)No because neither of them like cleaning
D)​No because filth is good

Question 54

​Which one of the following is a way to get out of a repeated Prisoner's Dilemma Nash Equilibrium?

A)​Do not be forgiving
B)Be forgiving
C)Punish the competitors severely forever
D)​All of the above

Question 55

​The equilibrium outcome used in both the sequential and simultaneous move games is known as

A)​The centrality equilibrium
B)First mover equilibrium
C)Nash equilibrium
D)​All of the above

Question 56

​The Nash equilibrium is

A)​a pair of strategies,one for each player ,in which player A's strategy is the best response while player B's is not
B)a pair of strategies,one for each player ,in which player B's strategy is the best response while player A's is not
C)a pair of strategies,one for each player,in which each player's strategy is the best response to the other's
D)​a pair of strategies,one for each player,in which neither strategy is a best response

Question 57

​Use the following case from questions
Two roommates John and Joe are playing a simultaneous game of cleaning the apartment.If neither of them clean,the apartment gets filthy and both get a utility of 2.If John cleans and Joe doesn't,John gets a utility of 1 and Joe gets a utility of 4.If Joe cleans and John doesn't,Joe gets a utility of 1 and John gets a utility of 4 and if both clean up the apartment,they each get a utility of 3.
​If the apartment owner decides to fine both the roommates if the apartment is dirty,such that now if neither of them clean they each get a 5 utility loss,what would the new equilibrium be now?

A)​John cleans,Joe doesn't
B)Joe cleans,John doesn't
C)Neither of them clean the apartment
D)​Both A&B

Question 58

​Use the following case from questions
A shoplifter and a security guard are playing a simultaneous game.If the shoplifter steals and the security guard is vigilant,the shoplifter gets caught she suffers a loss of 20,and the security guard gets a bonus worth 15.If the shoplifter steals and the security guard is not vigilant,she does not get caught and gains 15 and the guard loses 5.If the shoplifter does not steal and the guard is vigilant,the guard loses 3 for the effort,while the shoplifter gains nothing and if the shoplifter does not steal and the guard is not vigilant,neither gain anything
​If the security guard knows that the shoplifter has been caught before,his best response would be

A)​Being watchful
B)Sleeping on the job
C)Run
D)​Hide

Question 59

​Which one of the following is a way to get out of a repeated Prisoner's Dilemma Nash Equilibrium?

A)​Start by cooperating
B)Start the game by punishing the rivals
C)Start the game by cheating on the rivals
D)​All of the above

Question 60

​Use the following case from questions
Two ice cream trucks A&B are playing a simultaneous pricing game.If one of them prices low,he gets all the customers,a payoff of 12,while other gets zero.If both price high they each get a payoff of 6 and if both price low,they get a payoff of 5.
​The types of games analyzed by the Nash equilibrium are

A)​Simultaneous move games
B)Sequential move games
C)Both of the above
D)​None of the above

Question 61

​Which of the following is a violation of the antitrust laws?

A)​A firm discussing/fixing price with its competitors
B)Making arrangements to stay out each other's markets
C)Merging with the competitor to eliminate competition
D)​All of the above

Question 62

Which one of the following is a way to get out of a repeated Prisoner's Dilemma Nash Equilibrium?

A)​Be envious
B)Try to decrease your competitor's pie while increasing your own
C)Do not be envious-focus on your slice of the profit pie
D)​All of the above

Question 63

​Use the following to answer questions
Consider the following information for a simultaneous move game:  If you charge a low price (LP)and your rival charges a LP,you each earn $5 million in profits.  If both charge a high price (HP),each will each earn $10 million in profits.  However,if one charge a LP and the other does not,the firm that charges a LP will earn $15 million and the other firm will earn $1 million.
​If the game continues for infinity,then the new Nash Equilibrium is

A)​for one firm to charge a HP forever.
B)for your firm charge a LP when the other firm does.
C)for each firm to charge HP so long as the rival does,otherwise charge a LP.
D)​for each firm to charge LP until the rival does,and then to charge a HP forever.

Question 64

​Use the following setup for the next three questions.
Assume a simultaneous-move game.

​What is the best response of firm A,given firm B is charging a High Price?

A)​Charge a low price
B)Charge a high price
C)Charge zero,give the good away
D)​All of the above

Question 65

​A tit for tat strategy,players __________

A)​Never strikes first
B)Responds immediately to cheating
C)Limits the punishment to only one period
D)​All of the above

Question 66

​Which one of the following is a way to get out of a repeated Prisoner's Dilemma Nash Equilibrium?

A)​Make sure that your competitor clearly understands your actions and intentions
B)Make sure that your competitor keeps guessing about your actions and intentions
C)Make sure you keep your actions and intentions ambiguous
D)​All of the above

Question 67

​Use the following to answer questions 73-75
​Sam and Sarah are thinking about getting married.However if either of them cheats on the other,they would get a payoff of 10,while the other person gets zero.If neither cheat,they stay with each other and get a payoff of 7 each and if both cheat,the relationship falls apart and each get a payoff of 1.
​What is the Nash equilibrium of this game?

A)​Cheat,Cheat
B)Not cheat,Not cheat
C)Sam cheats,Sarah doesn't
D)​Sarah cheats,Sam doesn't

Question 68

​Use the following to answer questions 73-75
​Sam and Sarah are thinking about getting married.However if either of them cheats on the other,they would get a payoff of 10,while the other person gets zero.If neither cheat,they stay with each other and get a payoff of 7 each and if both cheat,the relationship falls apart and each get a payoff of 1.
​Is this outcome efficient?

A)​Yes because both of them are maximizing their payoffs
B)No,because both of them can do better than their current equilibrium
C)No,because cheating is goodNo,because cheating is good
D)​All of the above

Question 69

​Use the following setup for the next three questions.
Assume a simultaneous-move game.

​What is the Nash equilibrium of the game?

A)​Low,Low
B)Low,High
C)High,Low
D)​High,High

Question 70

​Use the following to answer questions 73-75
​Sam and Sarah are thinking about getting married.However if either of them cheats on the other,they would get a payoff of 10,while the other person gets zero.If neither cheat,they stay with each other and get a payoff of 7 each and if both cheat,the relationship falls apart and each get a payoff of 1.
​The equilibrium of this game indicates

A)​Self-interest can sometimes lead to sub-optimal outcomes
B)Rationality can sometimes lead to inefficient outcomes
C)All of the above
D)​None of the above

Question 71

​In a two-person repeated game,a tit-for-tat strategy is

A)​When each player pursues his or her own self-interest without any cooperation
B)When players start off as non-cooperative and then cooperate when one or both players show interest in colluding
C)When players start off by cooperating and then mimic the other player's last move
D)​With neither players defecting

Question 72

​Game theory assumes that players in the game act

A)​Rationally
B)Optimally
C)In their own self-interest
D)​All the above

Question 73

​Use the following setup for the next three questions.
Assume a simultaneous-move game.

​What is the best response of firm B,given firm A is charging a low price?

A)​Charge a low price
B)Charge a high price
C)Charge zero,give the good away
D)​All of the above

Question 74

​A Prisoners Dilemma illustrates the fact that

A)​Rational choices can lead to inefficient outcomes
B)Rational choices always leads to good outcomes
C)Rational choices always lead to inefficient outcomes
D)​None of the above

Question 75

​First-mover advantage is a characteristic of

A)​A simultaneous-move game
B)A dominant strategy
C)A sequential-move game
D)​All of the above

Question 76

​In a tit for tat strategy players

A)​Focus on maximizing your own profit
B)Focus on minimizing the rivals profits
C)Make their strategy difficult for competitors to understand
D)​All of the above

Question 77

​Nash equilibrium is:

A)​where one player maximizes his payoff and the other doesn't
B)when each player's strategy is the best response to the other player's strategy
C)where the outcome is always efficient
D)​difficult to determine

Question 78

​Use the following to answer questions
Consider the following information for a simultaneous move game:  If you charge a low price (LP)and your rival charges a LP,you each earn $5 million in profits.  If both charge a high price (HP),each will each earn $10 million in profits.  However,if one charge a LP and the other does not,the firm that charges a LP will earn $15 million and the other firm will earn $1 million.
​What is the Nash equilibrium of the game?

A)​Each firm charges a LP
B)Each firm charges a HP
C)You charge a LP and your rival charges a HP
D)​None of the above.

Question 79

​Use the following to answer questions
Consider the following information for a simultaneous move game:  Two discount stores (megastore and superstore)are interested in expanding their market share through advertising.The table below depicts the strategic outcomes (profits)of both stores with and without advertising.

​The Nash equilibrium for the game is

A)​For both stores to advertise
B)For megastore to advertise and for superstore not to advertise
C)For megastore not to advertise and for superstore to advertise
D)​For both stores to not advertise

Question 80

​In repeated games,all of the following allow a firm to escape an inefficient "prisoners dilemma" equilibrium except

A)​Be nice,don't strike first
B)Respond immediately to non-cooperation
C)Punish competitors as much as you can
D)​Make sure your competitors can easily interpret your actions