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A noncooperative equilibrium is one in which:


A) the participants act independently, pursuing only their individual interests.
B) a negative-negative outcome always results.
C) a dominant strategy exists for both players.
D) each player ignores the actions of the other players.

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

Correct Answer

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A

What can be said about the outcome of a game that has reached a Nash equilibrium?


A) There is a stable outcome.
B) There is no stable outcome.
C) A positive-positive outcome can never be reached.
D) Each player has achieved the highest payoff possible for this particular outcome.

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

Correct Answer

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In a game in which a player's outcome depends on another player's choices, behaving rationally involves:


A) behaving strategically.
B) ignoring the behavior of other actors.
C) acting in a way to help others.
D) All of these statements are true.

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

Correct Answer

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If there is no single strategy in a game that is best regardless of other players' behavior:


A) there is no dominant strategy.
B) the dominant strategy will be to defect.
C) a noncooperative equilibrium is the only possible outcome.
D) the game is a prisoners' dilemma.

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

Correct Answer

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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.What will be the outcome of this game? A) Starbucks will expand and Dunkin' Donuts will not expand. B) Starbucks will not expand and Dunkin' Donuts will expand. C) Starbucks and Dunkin' Donuts will both expand. D) Neither Starbucks nor Dunkin' Donuts will expand. 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.What will be the outcome of this game?


A) Starbucks will expand and Dunkin' Donuts will not expand.
B) Starbucks will not expand and Dunkin' Donuts will expand.
C) Starbucks and Dunkin' Donuts will both expand.
D) Neither Starbucks nor Dunkin' Donuts will expand.

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

Correct Answer

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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 Sarah and Joe are faced with the choices outlined in the figure, what outcome could we predict? A) Both Joe and Sarah will put forth low effort. B) Joe will put forth high effort and Sarah will put forth low effort. C) Joe will put forth low effort and Sarah will put forth high effort. D) Both Joe and Sarah will put forth high effort. 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 Sarah and Joe are faced with the choices outlined in the figure, what outcome could we predict?


A) Both Joe and Sarah will put forth low effort.
B) Joe will put forth high effort and Sarah will put forth low effort.
C) Joe will put forth low effort and Sarah will put forth high effort.
D) Both Joe and Sarah will put forth high effort.

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

Correct Answer

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If Nike and adidas are faced with the game in the figure shown, we can predict: A) an outcome that is good for society but less than ideal for these companies. B) an outcome that is less than ideal for society, but optimal for these companies. C) that both companies will choose their dominant strategies, and society will lose. D) None of these is likely to happen. If Nike and adidas are faced with the game in the figure shown, we can predict:


A) an outcome that is good for society but less than ideal for these companies.
B) an outcome that is less than ideal for society, but optimal for these companies.
C) that both companies will choose their dominant strategies, and society will lose.
D) None of these is likely to happen.

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

Correct Answer

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A

The prisoner's dilemma can be summarized in a:


A) strategy matrix.
B) strategy tree.
C) decision matrix.
D) flowchart.

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

Correct Answer

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In real life, people's behavior is constrained by the:


A) laws of nature.
B) legislated rules of society.
C) costs of various actions.
D) All of these are rules that constrain people's behavior.

E) None of the above
F) All of the above

Correct Answer

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Which of the following is an example of a real-life rule that might constrain people's behavior?


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

Correct Answer

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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.According to the figure, if Joe puts forth high effort, then Sarah should: A) put forth high effort. B) put forth low effort. C) refrain from making a decision. D) convince Joe to put forth low effort. 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.According to the figure, if Joe puts forth high effort, then Sarah should:


A) put forth high effort.
B) put forth low effort.
C) refrain from making a decision.
D) convince Joe to put forth low effort.

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

Correct Answer

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Games with a noncooperative equilibrium:


A) always result in a negative-negative outcome.
B) always result in a positive-positive outcome.
C) can result in either a positive-positive or negative-negative outcome.
D) always result in a positive-negative outcome (zero-sum) .

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

Correct Answer

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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 Starbucks expands into the new area, then Dunkin' Donuts should: A) also expand. B) not expand. C) attempt to cooperate. D) convince Starbucks not to expand. 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 Starbucks expands into the new area, then Dunkin' Donuts should:


A) also expand.
B) not expand.
C) attempt to cooperate.
D) convince Starbucks not to expand.

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

Correct Answer

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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.What profits can we predict Starbucks will earn given the outcome of this game? A) $2 million B) −$1 million C) $0 million D) -$2 million 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.What profits can we predict Starbucks will earn given the outcome of this game?


A) $2 million
B) −$1 million
C) $0 million
D) -$2 million

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

Correct Answer

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The prisoner's dilemma is a:


A) zero sum game.
B) game of chance.
C) game with no dominant strategies.
D) game with a stable equilibrium.

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

Correct Answer

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Once a Nash equilibrium has been reached in a one-time game:


A) a stable outcome is impossible.
B) players have no incentive to change their choices.
C) players have an incentive to change their choices.
D) no player can be made better off.

E) A) and C)
F) C) and D)

Correct Answer

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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.According to the figure, Sarah: A) should put forth low effort, regardless of what Joe chooses to do. B) should put forth high effort, regardless of what Joe chooses to do. C) does not have a dominant strategy. D) should use the first-mover advantage and put forth low effort. 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.According to the figure, Sarah:


A) should put forth low effort, regardless of what Joe chooses to do.
B) should put forth high effort, regardless of what Joe chooses to do.
C) does not have a dominant strategy.
D) should use the first-mover advantage and put forth low effort.

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

Correct Answer

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The figure shown displays the choices that could be made by two firms in an industry: Tesla and Ford. 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? A) Tesla and Ford will both invest. B) Tesla will invest and Ford will not invest. C) Tesla will not invest and Ford will invest. D) Neither Tesla nor Ford will invest. The figure shown displays the choices that could be made by two firms in an industry: Tesla and Ford. 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?


A) Tesla and Ford will both invest.
B) Tesla will invest and Ford will not invest.
C) Tesla will not invest and Ford will invest.
D) Neither Tesla nor Ford will invest.

E) All of the above
F) A) and B)

Correct Answer

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Which of the following statements about outcomes in repeated games is true?


A) A noncooperative outcome is more likely to occur in a repeated game than in a one-time game.
B) Cooperative outcomes never occur in repeated games.
C) A cooperative outcome is more likely to occur in a repeated game than in a one-time game.
D) Players always cooperate and enjoy a mutually beneficial equilibrium.

E) A) and C)
F) A) and B)

Correct Answer

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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.If the new firm expands, then Verizon should: A) advertise. B) not advertise. C) advertise only if the new firm can impose a commitment device. D) None of these statements are true. 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.If the new firm expands, then Verizon should:


A) advertise.
B) not advertise.
C) advertise only if the new firm can impose a commitment device.
D) None of these statements are true.

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

Correct Answer

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A

Showing 1 - 20 of 155

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