Question 1

In which type of game does one player make an offer that the other player must then accept or reject?

Accepted Answer

A)  Repeated sequential
B)  Prisoners' dilemma
C)  Ultimatum
D)  NegotiationE) C) and D)
F) A) and B)

Question 2

If a player is following a tit-for-tat strategy in a repeated game and an opponent makes a cooperative move, the player will:

Accepted Answer

A)  collude.
B)  make a cooperative move in the next round.
C)  price compete.
D)  defect.E) None of the above
F) A) and D)

Question 3

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 payoff can we predict Joe will receive as the outcome of this game?

Accepted Answer

A)  5
B)  7
C)  9
D)  13E) All of the above
F) A) and D)

Question 4

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.Starbucks:

Accepted Answer

A)  has a dominant strategy to expand.
B)  has a dominant strategy not to expand.
C)  has the first-mover advantage.
D)  should wait to see what Dunkin' Donuts is going to do.E) All of the above
F) A) and B)

Question 5

The figure shown displays the choices that could be made by two firms in an industry: Target and Kohl's. Both companies are trying to decide how much to discount their products. 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?

Accepted Answer

A)  Target will offer no discount and Kohl's will offer a discount of 15% off.
B)  Target will offer no discount and Kohl's will offer a discount of 30% off.
C)  Target will offer a discount of 25% off and Kohl's will offer a discount of 20% off.
D)  Target will offer a discount of 25% off and Kohl's will offer a discount of 40% off.E) C) and D)
F) B) and D)

Question 6

In the real world, wage negotiations:

Accepted Answer

A)  follow the ultimatum game.
B)  often end with the company enjoying a larger payoff, since it can afford to be more patient.
C)  often end with the workers enjoying a larger payoff, since they are not losing as much in profit as the company.
D)  may have several rounds of offers and counteroffers.E) B) and C)
F) B) and D)

Question 7

Commitment strategies are:

Accepted Answer

A)  not needed to reach a mutually beneficial equilibrium in repeated games.
B)  always needed to reach a mutually beneficial equilibrium in one-time games.
C)  needed to reach a mutually beneficial equilibrium in both one-time and repeated games.
D)  not useful in reaching a mutually beneficial equilibrium and don't occur often in reality.E) A) and B)
F) B) and C)

Question 8

The game in the figure shown is a version of:

Accepted Answer

A)  a sequential game.
B)  a one-time game.
C)  a cooperative game.
D)  an ultimatum.E) All of the above
F) C) and D)

Question 9

One player must make a decision before another player does in a:

Accepted Answer

A)  commitment game.
B)  simultaneous game.
C)  sequential game.
D)  prisoners' dilemma.E) A) and C)
F) C) and D)

Question 10

A strategy that is the best one to follow no matter what strategy other players choose is called a:

Accepted Answer

A)  golden decision.
B)  no-regrets strategy.
C)  dominant strategy.
D)  zero-sum strategy.E) None of the above
F) All of the above

Question 11

Reaching a positive-positive outcome through a commitment strategy:

Accepted Answer

A)  will benefit the players but can never serve public interest.
B)  may not always benefit the players.
C)  can benefit everyone.
D)  will always benefit everyone.E) B) and D)
F) C) and D)

Question 12

How often does collusion occur in the current world of business?

Accepted Answer

A)  It rarely occurs.
B)  It never occurs; it's just a theory.
C)  It no longer occurs due to government regulations.
D)  It commonly occurs.E) A) and B)
F) A) and C)

Question 13

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.If Joe and Sarah act in their own self-interest, what utility will Sarah receive?

Accepted Answer

A)  Only Joe
B)  Only Sarah
C)  Neither Sarah nor Joe
D)  Both Sarah and JoeE) C) and D)
F) All of the above

Question 14

When all players in a game choose the best strategy they can, given the choices of all other players, there is always a:

Accepted Answer

A)  Nash equilibrium.
B)  positive-positive outcome.
C)  cooperative equilibrium.
D)  negative-negative outcome.E) B) and C)
F) A) and D)

Question 15

Which of the following statements about games is true?

Accepted Answer

A)  They will always have a dominant strategy
B)  They are always zero sum
C)  They will always have several stable outcomes
D)  None of these are true.E) A) and C)
F) B) and C)

Question 16

If each player in a repeated game responds by imitating the action of an opponent in the previous round, the players are following a:

Accepted Answer

A)  repeated cooperation agreement.
B)  collusion plan.
C)  commitment strategy.
D)  tit-for-tat strategy.E) A) and C)
F) B) and C)

Question 17

A game with a first-mover advantage is one in which:

Accepted Answer

A)  the player who chooses first gets a higher payoff than those who follow.
B)  the player who chooses first gets to decide if a repeated game will start with cooperation from the beginning.
C)  the first player to move determines the payoff for the rest of the game.
D)  None of these statements are true.E) A) and C)
F) C) and D)

Question 18

Which of the following statements about repeated games is true?

Accepted Answer

A)  Players no longer need commitment strategies to reach a mutually beneficial equilibrium.
B)  Players will never reach a mutually beneficial equilibrium.
C)  There are no dominant strategies.
D)  Only negative-negative outcomes are possible.E) All of the above
F) A) and C)

Question 19

The figure shown displays the choices that could be made by Verizon and a new firm in the 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?

Accepted Answer

A)  The new firm will expand; Verizon will advertise; the new firm will choose high prices.
B)  The new firm will expand; Verizon will advertise; the new firm will choose low prices.
C)  The new firm will expand; Verizon will not advertise; the new firm will choose high prices.
D)  The new firm will not expand.E) A) and B)
F) All of the above

Question 20

To economists, a game is:

Accepted Answer

A)  any situation involving at least two players in which one player's outcome depends on another player's choices.
B)  a trivial pursuit that should not be used to analyze the economy or its actors.
C)  a way to simplify and eliminate strategic situations, like war between nations.
D)  All of these statements are true.E) None of the above
F) A) and C)

Exam 9: Game Theory and Strategic Thinking

Correct Answer
verified

To economists, a game is:

Correct Answer
verified

Which of the following statements about games is true?

Correct Answer
verified

How often does collusion occur in the current world of business?

Correct Answer
verified

Correct Answer
verified

A strategy that is the best one to follow no matter what strategy other players choose is called a:

Correct Answer
verified

If a player is following a tit-for-tat strategy in a repeated game and an opponent makes a cooperative move, the player will:

Correct Answer
verified

One player must make a decision before another player does in a:

Correct Answer
verified

A game with a first-mover advantage is one in which:

Correct Answer
verified

Reaching a positive-positive outcome through a commitment strategy:

Correct Answer
verified

In which type of game does one player make an offer that the other player must then accept or reject?

Correct Answer
verified

Correct Answer
verified

Commitment strategies are:

Correct Answer
verified

If each player in a repeated game responds by imitating the action of an opponent in the previous round, the players are following a:

Correct Answer
verified

The figure shown displays the choices that could be made by Verizon and a new firm in the 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?

Correct Answer
verified

Which of the following statements about repeated games is true?

Correct Answer
verified

When all players in a game choose the best strategy they can, given the choices of all other players, there is always a:

Correct Answer
verified

In the real world, wage negotiations:

Correct Answer
verified

The game in the figure shown is a version of:

Correct Answer
verified

Correct Answer
verified

Exam 9: Game Theory and Strategic Thinking

Correct AnswerverifiedShow Answer

To economists, a game is:

Correct AnswerverifiedShow Answer

Which of the following statements about games is true?

Correct AnswerverifiedShow Answer

How often does collusion occur in the current world of business?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A strategy that is the best one to follow no matter what strategy other players choose is called a:

Correct AnswerverifiedShow Answer

If a player is following a tit-for-tat strategy in a repeated game and an opponent makes a cooperative move, the player will:

Correct AnswerverifiedShow Answer

One player must make a decision before another player does in a:

Correct AnswerverifiedShow Answer

A game with a first-mover advantage is one in which:

Correct AnswerverifiedShow Answer

Reaching a positive-positive outcome through a commitment strategy:

Correct AnswerverifiedShow Answer

In which type of game does one player make an offer that the other player must then accept or reject?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Commitment strategies are:

Correct AnswerverifiedShow Answer

If each player in a repeated game responds by imitating the action of an opponent in the previous round, the players are following a:

Correct AnswerverifiedShow Answer

The figure shown displays the choices that could be made by Verizon and a new firm in the 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?

Correct AnswerverifiedShow Answer

Which of the following statements about repeated games is true?

Correct AnswerverifiedShow Answer

When all players in a game choose the best strategy they can, given the choices of all other players, there is always a:

Correct AnswerverifiedShow Answer

In the real world, wage negotiations:

Correct AnswerverifiedShow Answer

The game in the figure shown is a version of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified