Question 1

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

Question 2

Behaving strategically means:

Accepted Answer

A)   evaluating decisions in which players act in their own self-interest, but the interplay of those decisions does not exist.
B)   acting to achieve a goal by withholding key information from the person with whom an exchange is being made.
C)   acting to achieve a goal by anticipating the interplay between your own and others' decisions.
D)   evaluating the impact of your choices on an uninvolved third party.E) C) and D)
F) All of the above

Question 3

___________ is a winning strategy in a game of bargaining.

Accepted Answer

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

Question 4

If Nike and Adidas are faced with the game in the figure shown,we can predict:

Accepted Answer

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

Question 5

The figure shown portrays a game using a:

Accepted Answer

A)   decision tree.
B)   decision matrix.
C)   flowchart.
D)   graph.E) A) and C)
F) A) and B) B

Question 6

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

Question 7

Games that don't have a dominant strategy:

Accepted Answer

A)   do not have stable equilibrium outcomes.
B)   may have stable equilibrium outcomes.
C)   always have stable equilibrium outcomes.
D)   don't exist; all games have at least one dominant strategy.E) None of the above
F) A) and B)

Question 8

When businesses cooperate and agree to hold prices high,it is called ____________,and when they reach a noncooperative equilibrium it is called _______________.

Accepted Answer

A)   collusion; competition
B)   competition; collusion
C)   commitment strategy; collusion
D)   collusion; commitment strategyE) None of the above
F) C) and D)

Question 9

The process of analyzing a problem in reverse-starting with the last choice,then the second-to-last choice,and so on,to determine the optimal strategy-is called:

Accepted Answer

A)   backward induction.
B)   backward thinking.
C)   forward thinking.
D)   backward working.E) All of the above
F) A) and B)

Question 10

When competing firms have a commitment strategy,it is called:

Accepted Answer

A)   collusion.
B)   competitive cooperation.
C)   predatory pricing.
D)   competition.E) None of the above
F) A) and B) A

Question 11

This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts.Both companies are trying to decide whether or not to expand in an area.The area can handle only one of them expanding,and whoever expands will cause the other to lose some business.If they both expand,the market will be saturated,and neither company will do well.The payoffs are the additional profits (or losses) they will earn.
According to the figure shown,Dunkin Donuts:

Accepted Answer

A)   should expand, regardless of what Starbucks chooses to do.
B)   should not expand, regardless of what Starbucks chooses to do.
C)   has first-mover advantage.
D)   does not have a dominant strategy.E) None of the above
F) B) and D)

Question 12

This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts.Both companies are trying to decide whether or not to expand in an area.The area can handle only one of them expanding,and whoever expands will cause the other to lose some business.If they both expand,the market will be saturated,and neither company will do well.The payoffs are the additional profits (or losses) they will earn.
The game in the figure shown is a version of:

Accepted Answer

A)   the prisoner's dilemma.
B)   the first-mover advantage.
C)   a sequential game.
D)   a repeated game.E) All of the above
F) A) and B)

Question 13

The game in the figure shown is a version of:

Accepted Answer

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

Question 14

When the trade-offs you face are determined by the choices someone else will make,behaving rationally involves:

Accepted Answer

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

Question 15

All games involve which of the following?

Accepted Answer

A)   A predictable outcome
B)   Payoffs
C)   Full information
D)   A game masterE) B) and D)
F) B) and C)

Question 16

A decision matrix:

Accepted Answer

A)   summarizes the players, strategies, and payoffs associated with a game.
B)   outlines the clear outcome of any strategy-based game.
C)   shows only the decisions of one player.
D)   is not useful in evaluating the strategic choices.E) B) and D)
F) All of the above

Question 17

This figure shows 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 working on a project together and faced with the choices outlined in the figure shown,we can predict the outcome will be that:

Accepted Answer

A)   both Joe and Sarah 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 put forth high effort.E) C) and D)
F) All of the above

Question 18

If Nike and Adidas are faced with the game in the figure,we can see that:

Accepted Answer

A)   Nike has a dominant strategy, but Adidas does not.
B)   Adidas has a dominant strategy, but Nike does not.
C)   Neither company has a dominant strategy.
D)   Both companies have a dominant strategy.E) B) and C)
F) A) and C)

Question 19

A key to gaining cooperative behavior in a repeated game is:

Accepted Answer

A)   that the game must be repeated indefinitely.
B)   there must be a definitive end to the game.
C)   the players must commit to always acting in their own self-interest.
D)   at least one player must have a dominant strategy.E) A) and B)
F) A) and D)

Question 20

If you are following a tit-for-tat strategy in a repeated game,and your opponent makes a cooperative move,you 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) B) and D)

Exam 9: Game Theory and Strategic Thinking

In the prisoner's dilemma game:

Correct Answer
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Behaving strategically means:

Correct Answer
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___________ is a winning strategy in a game of bargaining.

Correct Answer
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If Nike and Adidas are faced with the game in the figure shown,we can predict:

Correct Answer
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The figure shown portrays a game using a:

Correct Answer
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B

Cooperation in prisoner's dilemma-type games:

Correct Answer
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B

Games that don't have a dominant strategy:

Correct Answer
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When businesses cooperate and agree to hold prices high,it is called ,and when they reach a noncooperative equilibrium it is called ___.

Correct Answer
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The process of analyzing a problem in reverse-starting with the last choice,then the second-to-last choice,and so on,to determine the optimal strategy-is called:

Correct Answer
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When competing firms have a commitment strategy,it is called:

Correct Answer
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A

Correct Answer
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Correct Answer
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The game in the figure shown is a version of:

Correct Answer
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When the trade-offs you face are determined by the choices someone else will make,behaving rationally involves:

Correct Answer
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All games involve which of the following?

Correct Answer
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A decision matrix:

Correct Answer
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Correct Answer
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If Nike and Adidas are faced with the game in the figure,we can see that:

Correct Answer
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A key to gaining cooperative behavior in a repeated game is:

Correct Answer
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If you are following a tit-for-tat strategy in a repeated game,and your opponent makes a cooperative move,you will:

Correct Answer
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Exam 9: Game Theory and Strategic Thinking

In the prisoner's dilemma game:

Correct AnswerverifiedShow Answer

Behaving strategically means:

Correct AnswerverifiedShow Answer

___________ is a winning strategy in a game of bargaining.

Correct AnswerverifiedShow Answer

If Nike and Adidas are faced with the game in the figure shown,we can predict:

Correct AnswerverifiedShow Answer

The figure shown portrays a game using a:

Correct AnswerverifiedB

Cooperation in prisoner's dilemma-type games:

Correct AnswerverifiedB

Games that don't have a dominant strategy:

Correct AnswerverifiedShow Answer

When businesses cooperate and agree to hold prices high,it is called ____________,and when they reach a noncooperative equilibrium it is called _______________.

Correct AnswerverifiedShow Answer

The process of analyzing a problem in reverse-starting with the last choice,then the second-to-last choice,and so on,to determine the optimal strategy-is called:

Correct AnswerverifiedShow Answer

When competing firms have a commitment strategy,it is called:

Correct AnswerverifiedA

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The game in the figure shown is a version of:

Correct AnswerverifiedShow Answer

When the trade-offs you face are determined by the choices someone else will make,behaving rationally involves:

Correct AnswerverifiedShow Answer

All games involve which of the following?

Correct AnswerverifiedShow Answer

A decision matrix:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If Nike and Adidas are faced with the game in the figure,we can see that:

Correct AnswerverifiedShow Answer

A key to gaining cooperative behavior in a repeated game is:

Correct AnswerverifiedShow Answer

If you are following a tit-for-tat strategy in a repeated game,and your opponent makes a cooperative move,you will:

Correct AnswerverifiedShow Answer

Correct Answer
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B

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B

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When businesses cooperate and agree to hold prices high,it is called ,and when they reach a noncooperative equilibrium it is called ___.

Correct Answer
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Correct Answer
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Correct Answer
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A

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