Econ
Our preferences are affected by indoctrination through the
. ideologies of others.
Lab experiments show a different outcome for the Ultimatum Game compared to the outcome predicted by game theory because
fairness is important.
An example of a monopolistically competitive firm
fast food industry
What is not an example of a real life zero sum game?
free market transaction.
A first-mover advantage occurs if
the first mover to act in a sequential game gets a benefit from doing so.
A collusive agreement between two firms is likely to break down when ____________.
the market has little long−term value.
Nash Equilibrium
when players choose strategies that are best responses to the strategy of others.
Identify the key assumption(s) made about a Nash equilibrium.
All players understand that other players understand the game. All players understand the game and the payoffs associated with each strategy
How could the game be changed so that in equilibrium the players do trust one another?
Allow the players to take revenge.
A zero-sum game is when
A zero-sum game is when
For a market to be characterized as monopolistically competitive, there must be
Differentiated Products zero economic profits in the long run. many sellers.
Which of the following common features do monopolistically competitive markets and monopolies share?
Firms face downward-sloping demand curves.
How is a Nash equilibrium different from a dominant strategy equilibrium
For a given game, there can only be one dominant strategy equilibrium but multiple Nash equilibriums.
Why might game theory not always be an accurate predictor of real-world situations?
We do not always know the exact payoffs, since payoffs involve attitudes and feelings as well as monetary gains.
An extensive-form game is representative of games that
Moves are made simultaneously in a simultaneous move game and sequentially in an extensive-form game.
Monopolistically competitive firms earn zero economic profit in the long run as do perfectly competitive firms. Does this mean that total surplus is maximized in a monopolistically competitive market?
No, because firms produce where price is greater than marginal cost
Is a player's best response in a game the same as his dominant strategy?
Not necessarily. If a player has a dominant strategy, then it is his best response; however, every best response is not always a dominant strategy.
What happens in a monopolistically competitive market when firms exitfirms exit the market
The existing firm's demand curve shifts out and becomes steeper
How is a monopolistically competitive market similar to a perfectly competitive market?
There are no restrictions on the entry of new firms.
An example of indoctrination is ___________.
not smoking due to antismoking campaigns.
