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Exam 9: Game Theory and Strategic Thinking

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Question 41

Multiple Choice

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Which of the following statements about games is true?

A) There is always only one possible outcome.
B) Noncooperative equilibriums are always negative-negative outcomes.
C) There may be several stable outcomes.
D) A dominant strategy must be present to reach a stable equilibrium.

E) B) and C)
F) B) and D)

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Question 42

Multiple Choice

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Which of the following describes an ultimatum game?

A) One player makes an offer and the other player can choose to either accept or reject.
B) One player makes an offer and the other player can choose whether to accept or make a counteroffer.
C) Both players make offers in a repeated sequential game.
D) A moderator makes an offer to each player, after which they can choose to play the game or not.

E) None of the above
F) A) and D)

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Question 43

Multiple Choice

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What is the Nash Equilibrium of the game in the figure shown?

If a player defects in a repeated game and an opponent is following a tit-for-tat strategy, we can predict the opponent will:

The figure shown displays the choices that could be made by two coffee shops: Starbucks and Dunkin' Donuts. Both companies are trying to decide whether or not to expand into a new area. The area can only handle one coffee shop's expansion, and the expansion of one shop will cause the other to lose some business. If both coffee shops expand, the market will become saturated and neither will do well. The payoffs for these shops are the additional profits (or losses) they will earn.If these players act in their own self-interest, then Dunkin' Donuts will earn:

A commitment strategy can:

All games involve which of the following?

The figure shown displays the choices that could be made by two coffee shops: Starbucks and Dunkin' Donuts. Both companies are trying to decide whether or not to expand into a new area. The area can only handle one coffee shop's expansion, and the expansion of one shop will cause the other to lose some business. If both coffee shops expand, the market will become saturated and neither will do well. The payoffs for these shops are the additional profits (or losses) they will earn.This figure uses a _______ to portray the decisions of Starbucks and Dunkin' Donuts.

All games involve which of the following?

The first-mover advantage is:

According to the figure shown, Nike:

In games, rules:

By committing to reduce one's options during a sequential game, a player can force a change in an opponents' strategy, resulting in a:

Backward induction is a useful tool for:

The figure shown represents the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.The game in the figure is a version of:

The figure shown displays the choices that could be made by two firms in an industry. The payoffs are the profits (in millions) these companies will earn as a result of their choices.What will be the outcome of this game?

According to the figure shown, if adidas commits to charging a low price, then Nike should:

The figure shown represents the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.What outcome can we predict for this game?

When your outcomes depend on another's choices, asking yourself _______ is the key to good decision making.

What is the Nash Equilibrium of the game in the figure shown?