Deck 12: Choices Involving Strategy

Question 1

Refer to Figure a.Charlie and Joe both want to ride shotgun with their mother,so they play a game of rock-paper-scissors to determine who gets to sit in the front seat.In the table,-1 represents a loss,1 a win and 0 a tie,and Joe's payoff is shown in the upper left-hand corner of each cell,while Charlie's appears in the lower right-hand corner.If Joe knows Charlie thinks he always throws scissors,what is Joe's best response?

A) Rock
B) Paper
C) Scissors
D) The answer cannot be determined from the information given.

Answer 1

Paper

Question 2

Refer to the game between James and Theodore depicted in Figure 12.1.Which of the following is true?

A) If James chooses Up, Theodore's best response is to choose Left.
B) If James chooses Down, Theodore's best response is to choose Right.
C) If Theodore chooses Left, James's best response is to choose Up.
D) If Theodore chooses Right, James's best response is to choose Down.

Answer 2

If Theodore chooses Right, James's best response is to choose Down.

Question 3

A strategy is dominated if:

A) there are no other strategies that yield higher payoffs, regardless of others' choices.
B) there is some other strategy that yields a strictly higher payoff regardless of others' choices.
C) there is some other strategy that yields a strictly higher payoff in some circumstances and that never yields a lower payoff regardless of others' choices.
D) there is some other strategy that yields a strictly higher payoff in some circumstances and may yield a lower payoff, depending upon other players' choices.

Answer 3

there is some other strategy that yields a strictly higher payoff regardless of others' choices.

Question 4

Refer to the game between James and Theodore depicted in Figure 12.1.Which of the following is true?

A) If James chooses Up, Theodore's best response is to choose Left.
B) If James chooses Down, Theodore's best response is to choose Right.
C) If Theodore chooses Left, James's best response is to choose Down.
D) If Theodore chooses Right, James's best response is to choose Up.

Question 5

A strategy is dominant if:

A) it is one of several best responses for a player, regardless of other players' choices.
B) it is a player's only best response, given a particular choice of the other players.
C) it is independent of other players' choices.
D) it is a player's only best response, regardless of other players' choices.

Question 6

Refer to the game between James and Theodore depicted in Figure 12.1.Who has a dominant strategy?

A) Only James
B) Only Theodore
C) Both James and Theodore
D) Neither James nor Theodore

Question 7

The iterative deletion of dominated strategies refers to the following process:

A) continue removing the weakly dominated strategies until there are no more weakly dominated strategies left to remove.
B) continue removing the dominant strategies until there are no more dominant strategies left to remove.
C) continue removing the dominated strategies until there are no more dominated strategies left to remove.
D) continue removing the best responses until there are no more best responses left to remove.

Question 8

A strategy is weakly dominated if:

A) there are no other strategies that yield higher payoffs, regardless of others' choices.
B) there is some other strategy that yields a strictly higher payoff regardless of others' choices.
C) there is some other strategy that yields a strictly higher payoff in some circumstances and that never yields a lower payoff regardless of others' choices.
D) there is some other strategy that yields a strictly higher payoff in some circumstances and may yield a lower payoff, depending upon other players' choices.

Question 9

Refer to the game between James and Theodore depicted in Figure 12.1.Which of the following is true?

A) If James chooses Up, Theodore's best response is to choose Left.
B) If James chooses Down, Theodore's best response is to choose Left.
C) If Theodore chooses Left, James's best response is to choose Up.
D) If Theodore chooses Right, James's best response is to choose Up.

Question 10

Refer to Figure b.Kate and Alice are sisters with a very strict mother.The girls are not allowed to watch television during the day when their mother is at work.The mother comes home one day and knows at least one girl was watching the television because it is warm.She sends the girls to their separate bedrooms while she decides what to do.After giving it some thought,she decides to send a message to the naughty girls and offers them the following deal: if they both deny watching TV,they will each be grounded for 3 weeks; if one squeals on the other,but the other denies watching TV,the squealer is grounded for 2 weeks,while the denier is grounded for 10; if they both squeal,each is grounded for 6 weeks.The following payoff matrix illustrates the girls' dilemma,with Kate's payoff shown in the upper left-hand corner of each cell and Alice's in the lower right-hand corner.What is Alice's dominant strategy?

A) Squeal
B) Deny
C) Alice does not have a dominant strategy.
D) Alice's dominant strategy depends upon what Kate does.

Question 11

In a one-stage game:

A) at least one participant observes a choice by another participant before making some decision.
B) each participant makes all of his choices before observing any choice by any other participant.
C) at least one participant makes his choice before observing the choices made by other participants.
D) one participant has full information of the other players' choices before making his choice.

Question 12

In a multiple-stage game:

A) at least one participant observes a choice by another participant before making some decision.
B) each participant makes all of his choices before observing any choice by any other participant.
C) at least one participant makes his choice before observing the choices made by other participants.
D) one participant has full information of the other players choices before making his choice.

Question 13

Refer to Figure a.Charlie and Joe both want to ride shotgun with their mother,so they play a game of rock-paper-scissors to determine who gets to sit in the front seat.If -1 represents a loss,1 a win and 0 a tie,and Joe's payoff is shown in the upper left-hand corner of each cell,while Charlie's appears in the lower right-hand corner,which set of rules is illustrated in the following payoff matrix?

A) Rock tears paper, paper covers scissors, scissors clip rock
B) Rock crushes scissors, scissors cuts paper, paper covers rock
C) Rock crushes scissors, scissors cuts paper, scissors clip rock
D) Rock tears paper, paper covers scissors, paper covers rock

Question 14

A player's best response is:

A) a strategy that provides him with a minimum payoff, assuming that other players behave in a specified way.
B) a strategy that provides him with the highest possible payoff, assuming that other players behave in a specified way.
C) a strategy that provides him with some payoff defined by a probability.
D) None of these is correct.

Question 15

Refer to Figure a.Charlie and Joe both want to ride shotgun with their mother,so they play a game of rock-paper-scissors to determine who gets to sit in the front seat.In the table,-1 represents a loss,1 a win and 0 a tie,and Joe's payoff is shown in the upper left-hand corner of each cell,while Charlie's appears in the lower right-hand corner.What is Charlie's dominant strategy?

A) Rock
B) Paper
C) Scissors
D) Charlie does not have a dominant strategy.

Question 16

Refer to the game between James and Theodore depicted in Figure 12.1.Which of the following is true?

A) If James chooses Up, Theodore's best response is to choose Right.
B) If James chooses Down, Theodore's best response is to choose Right.
C) If Theodore chooses Left, James's best response is to choose Up.
D) If Theodore chooses Right, James's best response is to choose Up.

Question 17

Refer to the game between James and Theodore depicted in Figure 12.1.Which of the following is true?

A) James's dominant strategy is to choose Up.
B) James's dominant strategy is to choose Down.
C) Theodore's dominant strategy is to choose Left.
D) Theodore's dominant strategy is to choose Right.

Question 18

Refer to Figure a.Charlie and Joe both want to ride shotgun with their mother,so they play a game of rock-paper-scissors to determine who gets to sit in the front seat.In the table,-1 represents a loss,1 a win and 0 a tie,and Joe's payoff is shown in the upper left-hand corner of each cell,while Charlie's appears in the lower right-hand corner.If Charlie knows Joe always throws scissors,what is Charlie's best response?

A) Rock
B) Paper
C) Scissors
D) The answer cannot be determined from the information given.

Question 19

A game is:

A) a situation in which each member of a group makes at least one decision and cares both about his own choice and about others' choices.
B) describes a situation in which strategy plays a role.
C) provides the foundation for understanding competition in industries with only a few producers.
D) All of these are correct.

Question 20

Refer to Figure b.Kate and Alice are sisters with a very strict mother.The girls are not allowed to watch television during the day when their mother is at work.The mother comes home one day and knows at least one girl was watching the television because it is warm.She sends the girls to their separate bedrooms while she decides what to do.After giving it some thought,she decides to send a message to the naughty girls and offers them the following deal: if they both deny watching TV,they will each be grounded for 3 weeks; if one squeals on the other,but the other denies watching TV,the squealer is grounded for 2 weeks,while the denier is grounded for 10; if they both squeal,each is grounded for 6 weeks.The following payoff matrix illustrates the girls' dilemma,with Kate's payoff shown in the upper left-hand corner of each cell and Alice's in the lower right-hand corner.What is Kate's dominant strategy?

A) Squeal
B) Deny
C) Kate does not have a dominant strategy.
D) Kate's dominant strategy depends upon what Alice does.

Question 21

Refer to Figure d,which illustrates a game played by Travis and Darren.What is the Nash equilibrium?

A) Travis chooses North, Darren chooses East
B) Travis chooses North, Darren chooses West
C) Travis chooses South, Darren chooses East
D) Travis chooses South, Darren chooses West

Question 22

Refer to Figure e.Brandon and Allie want to go on a date one summer evening.Allie is a Red Sox fan,while Brandon is a Mets fan.Both teams are playing that evening,but not against each other.Each would rather watch their favorite team,but neither can force the other to watch a particular game,and each is willing to suffer through the other's game if it means time together.What is the Nash equilibrium?

A) Allie watches the Red Sox, and Brandon watches the Mets.
B) Allie and Brandon both watch the Red Sox.
C) Allie and Brandon both watch the Mets.
D) Allie and Brandon both watch the Red Sox or Allie and Brandon both watch the Mets.

Question 23

Refer to Figure d,which illustrates a game played by Travis and Darren.Travis's dominant strategy is:

A) North.
B) South.
C) East.
D) West.

Question 24

Refer to Figure a.Charlie and Joe both want to ride shotgun with their mother,so they play a game of rock-paper-scissors to determine who gets to sit in the front seat.In the table,-1 represents a loss,1 a win and 0 a tie,and Joe's payoff is shown in the upper left-hand corner of each cell,while Charlie's appears in the lower right-hand corner.What is the Nash equilibrium?

A) Charlie chooses rock, Joe chooses rock
B) Charlie chooses rock, Joe chooses paper
C) Charlie chooses paper, Joe chooses scissors
D) There is no Nash equilibrium.

Question 25

Refer to Figure d,which illustrates a game played by Travis and Darren.For Darren,East is:

A) the best response.
B) the dominant strategy.
C) weakly dominated.
D) dominated.

Question 26

Refer to Figure e.Brandon and Allie want to go on a date one summer evening.Allie is a Red Sox fan,while Brandon is a Mets fan.Both teams are playing that evening,but not against each other.Each would rather watch their favorite team,but neither can force the other to watch a particular game,and each is willing to suffer through the other's game if it means time together.If Brandon watches the Mets,what is Allie's best response?

A) Allie should watch the Red Sox.
B) Allie should watch the Mets.
C) It does not matter which Allie watches; she is indifferent between the Red Sox and the Mets.
D) Allie should not consider Brandon's choice when making her decision.

Question 27

A self-enforcing agreement:

A) describes an agreement in which every party involved has an incentive to abide by it, assuming that others do the same.
B) requires a contract.
C) describes the strategy that makes up a Nash equilibrium.
D) describes the strategy that makes up a Nash equilibrium and describes an agreement in which every party involved has an incentive to abide by it, assuming that others do the same.

Question 28

Refer to the game between James and Theodore depicted in Figure 12.2.Which of the following is true?

A) If James chooses Up, Theodore's best response is to choose Right.
B) If James chooses Down, Theodore's best response is to choose Left.
C) If Theodore chooses Left, James's best response is to choose Up.
D) If Theodore chooses Right, James's best response is to choose Up.

Question 29

Refer to Figure 12.2.How many Nash equilibriums are there?

A) 0
B) 1
C) 2
D) 3

Question 30

Refer to the game between James and Theodore depicted in Figure 12.2.Which of the following is true?

A) If James chooses Up, Theodore's best response is to choose Right.
B) If James chooses Down, Theodore's best response is to choose Right.
C) If Theodore chooses Left, James's best response is to choose Down.
D) If Theodore chooses Right, James's best response is to choose Up.

Question 31

Refer to Figure e.Brandon and Allie want to go on a date one summer evening.Allie is a Red Sox fan,while Brandon is a Mets fan.Both teams are playing that evening,but not against each other.Each would rather watch their favorite team,but neither can force the other to watch a particular game,and each is willing to suffer through the other's game if it means time together.If Allie watches the Red Sox,what is Brandon's best response?

A) Brandon should watch the Red Sox.
B) Brandon should watch the Mets.
C) It does not matter which Brandon watches; he is indifferent between the Red Sox and the Mets.
D) Brandon should not consider Allie's choice when making her decision.

Question 32

Refer to the game between James and Theodore depicted in Figure 12.2.Which of the following is true?

A) If James chooses Up, Theodore's best response is to choose Right.
B) If James chooses Down, Theodore's best response is to choose Left.
C) If Theodore chooses Left, James's best response is to choose Down.
D) If Theodore chooses Right, James's best response is to choose Down.

Question 33

Refer to Figure d,which illustrates a game played by Travis and Darren.For Travis,North is:

A) the best response.
B) the dominant strategy.
C) weakly dominated.
D) dominated.

Question 34

Refer to Figure e.Brandon and Allie want to go on a date one summer evening.Allie is a Red Sox fan,while Brandon is a Mets fan.Both teams are playing that evening,but not against each other.Each would rather watch their favorite team,but neither can force the other to watch a particular game,and each is willing to suffer through the other's game if it means time together.If Brandon watches the Red Sox,what is Allie's best response?

A) Allie should watch the Red Sox.
B) Allie should watch the Mets.
C) It does not matter which Allie watches; she is indifferent between the Red Sox and the Mets.
D) Allie should not consider Brandon's choice when making her decision.

Question 35

Refer to Figure d,which illustrates a game played by Travis and Darren.Darren's dominant strategy is:

A) East.
B) West.
C) neither East nor West because East is only weakly dominated.
D) both East and West.

Question 36

Refer to the game between James and Theodore depicted in Figure 12.2.Which of the following is true?

A) If James chooses Up, Theodore's best response is to choose Left.
B) If James chooses Down, Theodore's best response is to choose Left.
C) If Theodore chooses Left, James's best response is to choose Down.
D) If Theodore chooses Right, James's best response is to choose Up.

Question 37

Refer to Figure e.Brandon and Allie want to go on a date one summer evening.Allie is a Red Sox fan,while Brandon is a Mets fan.Both teams are playing that evening,but not against each other.Each would rather watch their favorite team,but neither can force the other to watch a particular game,and each is willing to suffer through the other's game if it means time together.If Allie watches the Mets,what is Brandon's best response?

A) Brandon should watch the Red Sox.
B) Brandon should watch the Mets.
C) It does not matter which Brandon watches; he is indifferent between the Red Sox and the Mets.
D) Brandon should not consider Allie's choice when making her decision.

Question 38

Refer to Figure 12.1.What is the Nash equilibrium?

A) James chooses Up, Theodore chooses Left
B) James chooses Up, Theodore chooses Right
C) James chooses Down, Theodore chooses Left
D) James chooses Down, Theodore chooses Right

Question 39

Refer to the game between James and Theodore depicted in Figure 12.1.Who has a dominant strategy?

A) Only James
B) Only Theodore
C) Both James and Theodore
D) Neither James nor Theodore

Question 40

In a Nash equilibrium:

A) the strategy played by an individual depends upon the strategy played by other players
B) the strategy played by each individual is a best response to the strategies played by everyone else
C) there is no incentive for any player to deviate
D) All of these are correct.

Question 41

Reputations:

A) are generally not important in economic decisions.
B) influence a wide variety of important economic decisions.
C) represent manifestations of the winner's curse.
D) always lead to Nash disequilibriums.

Question 42

Which of the following is true about games in which people have different information?

A) Participants in these games can sometimes learn important information from the behavior of others.
B) Participants in these games never act in a way contrary to his immediate interests.
C) Participants in these games always act in a way contrary to his immediate interests.
D) These games always have a Nash equilibrium.

Question 43

Cooperation in an infinite game

A) is impossible.
B) is possible if grim strategies are used.
C) is guaranteed.
D) is possible if no one cares about the future.

Question 44

The winner's curse is the tendency in certain types of auctions for:

A) unsophisticated bidders to overpay whenever they win.
B) winners to be unable to win a subsequent auction.
C) winners to regret spending their money on the auctioned item.
D) the owner of the item up for auction to unfairly drive up auction prices.

Question 45

A player is playing a pure strategy when:

A) he chooses a rule to randomize over the choice of a strategy.
B) he chooses a strategy without randomizing.
C) there is uncertainty in his choice.
D) it is not perfectly predictable.

Question 46

Which of the following is a game of perfect information?

A) Chess
B) Poker
C) Rock-Paper-Scissors
D) Both chess and poker are games of perfect information.

Question 47

A player is playing a mixed strategy when:

A) he chooses a rule to randomize over the choice of a strategy.
B) he chooses a strategy without randomizing.
C) there is no uncertainty in his choice.
D) it is perfectly predictable.

Question 48

A best response function:

A) is also known as a strategic demand function.
B) is upward-sloping if free riding occurs.
C) shows the relationship between a player's choice and another player's best response.
D) plots all of the Nash equilibriums in a game.

Question 49

Playing the equilibrium of a one-stage game over and over again when the one-stage game is repeated is:

A) always a Nash equilibrium.
B) dominated in some cases.
C) weakly dominated in some cases.
D) a mixed-strategy equilibrium.

Question 50

Cooperation:

A) is sustained by the threat of punishment for bad behavior.
B) is sustained by the promise of reward for good behavior.
C) will fail to be established if threats/promises are not credible.
D) All of these are true about cooperation.

Question 51

In a mixed strategy equilibrium:

A) a player is indifferent between playing a dominated strategy and playing a non-dominated one.
B) players choose mixed strategies, but the mixed strategy chosen by each is not necessarily a best response to the mixed strategies chosen by the others.
C) players choose mixed strategies and the mixed strategy chosen by each is a best response to the mixed strategies chosen by the others.
D) a player is indifferent between playing a dominated strategy and playing a non-dominated one; and players choose mixed strategies and the mixed strategy chosen by each is a best response to the mixed strategies chosen by the others.

Question 52

Free riding:

A) cannot occur if strategizing takes place.
B) is reflected by a downward-sloping best response function.
C) is reflected by an upward-sloping best response function.
D) is no player's best response.

Question 53

Which of the following is true about games in which people have different information?

A) The behavior of the participants in the game reveals little to no information.
B) Participants in these games can sometimes have an incentive to mislead others through their behavior.
C) Participants in these games always act in a way contrary to his immediate interests.
D) These games never have a Nash equilibrium.

Question 54

A repeated game:

A) can be finite or infinite.
B) is formed by playing a simpler game many times in succession.
C) is a multiple-stage game.
D) All of these are true about repeated games.

Question 55

Cooperation:

A) is sustained by the threat of punishment for bad behavior.
B) is sustained by the promise of punishment for good behavior.
C) can be established even if threats/promises are not credible.
D) All of these are true about cooperation.

Question 56

Playing the equilibrium of a one-stage game over and over again when the one-stage game is repeated is:

A) always a Nash equilibrium.
B) only a Nash equilibrium if the game is finite.
C) only a Nash equilibrium if the game is infinite.
D) dominated in some cases.

Question 57

John Nash shared the Nobel Prize in Economics with:

A) John Harsanyi and Reinhard Selton.
B) Reinhard Selton.
C) Robert Auman and Reinhard Selton.
D) Milton Friedman.

Question 58

A second-price auction:

A) has two Nash equilibriums.
B) does not have a Nash equilibrium.
C) leads to a winner's curse.
D) avoids the winner's curse.

Question 59

Cooperation:

A) is a mixed strategy.
B) fails when the temptation to cheat is sufficiently strong.
C) eliminates the temptation to cheat.
D) is always a Nash equilibrium.

Question 60

Equilibrium in a repeated one-stage game:

A) requires cooperation.
B) does not require cooperation.
C) can only be found if the game is finite.
D) can only be found if the game is infinite.

Question 61

Suppose Dean and Kennedy are playing a single stage game.Each simultaneously chooses either 1 or 2.If they both select 1,Dean pays Kennedy $2.If they both pick 2,Dean pays Kennedy $4.If they select different numbers,Kennedy pays Dean $3.Draw a table showing the two players' strategies and payoffs.Are any strategies dominant? Weakly dominant? Dominated? Solve for a mixed strategy equilibrium.

Question 62

Use the concepts of reputation and asymmetric information to explain why some faculty members become less productive after gaining tenure.