Question 1

Games:

Accepted Answer

A)  only have one outcome possible.
B)  with noncooperative equilibriums are always negative-negative outcomes.
C)  may have several stable outcomes.
D)  must have a dominant strategy present to reach a stable equilibrium.E) A) and D)
F) A) and B)

Question 2

Game theory is:

Accepted Answer

A)  the study of how people behave strategically under different circumstances.
B)  used to predict the winners of only certain types of strategic games.
C)  used to evaluate the microeconomic choices that involve probabilities of different behaviors.
D)  the study of how people behave when playing a game involving odds,like horse racing.E) None of the above
F) C) and D)

Question 3

___________ becomes a winning strategy in a game of bargaining.

Accepted Answer

A)  Patience
B)  First-mover advantage
C)  Cooperation
D)  Self-interested behaviorE) B) and C)
F) A) and C)

Question 4

A Nash equilibrium:

Accepted Answer

A)  is reached when all players choose the best strategy they can,given the choices of all other players.
B)  is a point in a game when no player has an incentive to change his or her strategy,given what the other players are doing.
C)  is a concept named after the famous game theorist John Nash.
D)  All of these statements are true.E) A) and B)
F) B) and D)

Question 5

The study of how people behave strategically under different circumstances is called:

Accepted Answer

A)  game theory.
B)  game strategy.
C)  strategy optimization.
D)  strategy theory.E) A) and D)
F) B) and D)

Question 6

Using a decision tree:

Accepted Answer

A)  allows a player to see his optimal strategy in a sequential game.
B)  allows a player to see his optimal strategy in a simultaneous game.
C)  can help identify the dominant strategies in a prisoner's dilemma-type game.
D)  can help define a binding commitment strategy.E) A) and D)
F) None of the above

Question 7

An example of a real-life rule that might constrain our behavior is:

Accepted Answer

A)  the cost structure a business faces.
B)  the social norms around what people wear in public.
C)  the laws in place protecting our environment.
D)  All of these are examples of real-life rules.E) B) and D)
F) All of the above

Question 8

An ultimatum game:

Accepted Answer

A)  is a one-round sequential game.
B)  is one in which the first-mover has a great advantage.
C)  is when one player makes an offer and the other has to accept or reject.
D)  All of these statements are true.E) A) and B)
F) B) and C)

Question 9

In the prisoner's dilemma game:

Accepted Answer

A)  neither player has a dominant strategy.
B)  both players have a dominant strategy.
C)  only one player will ever have a dominant strategy.
D)  All of these may be true in a prisoner's dilemma game.E) B) and C)
F) All of the above

Question 10

In games,the strategy to reach a particular goal:

Accepted Answer

A)  is the same for everyone.
B)  can be different and still achieve the same goal.
C)  should be similar to what others have chosen to reach the same goal.
D)  has begun to be documented by economists.E) B) and D)
F) None of the above

Question 11

In sequential games,an especially important part of strategic behavior is to:

Accepted Answer

A)  "think forward,work backward."
B)  "think backward,work forward."
C)  "think forward,act backward."
D)  "think backward,act forward."E) A) and B)
F) A) and C)

Question 12

A dominant strategy:

Accepted Answer

A)  is the best one to follow no matter what strategy other players choose.
B)  exists in every game.
C)  is always the same for all players of a game.
D)  All of these statements are true.E) A) and B)
F) All of the above

Question 13

Cooperation in prisoner's dilemma-type games:

Accepted Answer

A)  always benefits the players and the public.
B)  always benefits the players,but does not always benefit the public.
C)  doesn't always benefit the players,but always benefits the public.
D)  doesn't always benefit the players or the public.E) All of the above
F) C) and D)

Question 14

Commitment strategies:

Accepted Answer

A)  are not necessary to reach a mutually beneficial equilibrium in repeated games.
B)  are often needed to reach a mutually beneficial equilibrium in single-round games.
C)  usually fail to work.
D)  are not observed in reality.E) A) and B)
F) All of the above

Question 15

In the prisoner's dilemma game:

Accepted Answer

A)  there is a dominant strategy for both players.
B)  there is a dominant strategy for only one player.
C)  there is no dominant strategy for either player.
D)  there may not be a dominant strategy for either player.E) B) and C)
F) A) and D)

Question 16

Which of the following is a subtle way for a company to reassure their competitors that they are committed to a tit-for-tat strategy?

Accepted Answer

A)  Price matching guarantees
B)  Setting prices below cost
C)  Collusion
D)  Offering a commitment strategyE) B) and C)
F) A) and B)

Question 17

An example of a real-life rule that might constrain people's behavior is:

Accepted Answer

A)  minimum wage legislation.
B)  having 24 hours in a day.
C)  the earth's limited supply of oil.
D)  All of these are examples of real-life rules.E) A) and D)
F) A) and C)

Question 18

All games involve which of the following?

Accepted Answer

A)  Rules
B)  A board
C)  Dice
D)  CardsE) A) and C)
F) B) and C)

Question 19

Repeated play can change the outcome in sequential games by:

Accepted Answer

A)  reducing the first-mover advantage.
B)  removing the incentive to cooperate.
C)  making collusion more probable.
D)  increasing the incentive to defect.E) B) and D)
F) C) and D)

Question 20

In the prisoner's dilemma:

Accepted Answer

A)  a negative-negative outcome can be predicted.
B)  a dominant strategy exists for only one player.
C)  a cooperative equilibrium can be predicted.
D)  All of these statements are true.E) A) and C)
F) A) and B)

Exam 9: Game Theory and Strategic Thinking

An ultimatum game:

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Commitment strategies:

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In games,the strategy to reach a particular goal:

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Using a decision tree:

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A Nash equilibrium:

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Repeated play can change the outcome in sequential games by:

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An example of a real-life rule that might constrain our behavior is:

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In the prisoner's dilemma game:

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Games:

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A dominant strategy:

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___________ becomes a winning strategy in a game of bargaining.

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Which of the following is a subtle way for a company to reassure their competitors that they are committed to a tit-for-tat strategy?

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An example of a real-life rule that might constrain people's behavior is:

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In the prisoner's dilemma:

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Game theory is:

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All games involve which of the following?

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In the prisoner's dilemma game:

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In sequential games,an especially important part of strategic behavior is to:

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Cooperation in prisoner's dilemma-type games:

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The study of how people behave strategically under different circumstances is called:

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