Chapter 12 - Game Theory

(Table 12.3) The payoffs represent profits. If Cape North and Imperial both choose their dominated strategy, Cape North will earn a profit of _____ and Imperial will earn a profit of _____.

$154; $154

(Table 12.12) The payoffs are profits in millions of dollars. The Nash equilibrium of this game is:

(20, 20)

(Table 12.9) Payoffs represent profits in thousands of dollars. In this game, the Nash equilibria are:

(210 , 250) and (180 , 180).

(Figure 12.9) Brad may threaten to play strategy _____ if Sly plays strategy _____.

B; B, in an attempt to move the game's outcome from (10 , 3) to (7 , 4)

(Table 12.1) Randy and Todd are playing a simultaneous game. Randy's dominant strategy is _____. and Todd's dominant strategy is _____.

Bottom; Left

A simultaneous game: A. involves at least one participant playing a random strategy after first observing the opponent's strategies. B. requires that both participants play exactly the same strategy at the same time. C. requires both players to base their strategy on backward induction. D. necessitates participants revealing their strategy at the same time without knowing the strategy of their opponent.

D. necessitates participants revealing their strategy at the same time without knowing the strategy of their opponent.

Suppose that Fizzy Soda and Townie Soda must choose whether to advertise their soft drinks. In a Nash equilibrium, both firms choose to advertise and earn weekly profits of $80,000. Which of the following statements is (are) TRUE? I. Neither firm has incentive to change its advertising strategy, given the strategy choice of its rival. II. If Townie Soda decided to stop advertising, its profits would fall below $80,000. III. If both firms stopped advertising, it is possible that each firm could earn profits greater than $80,000.

I, II, and III

(Table 12.8) Payoffs represent profits measured in thousands of dollars. Which of the following outcomes represent(s) a Nash equilibrium? I. (200 , 200) II. (600 , 990) III. (650, 400) IV. (400 , 825)

II and III

Which of the following statements is (are) TRUE? I. A Nash equilibrium requires that each player have a dominant strategy. II. A Nash equilibrium requires that each player have a dominated strategy. III. A game can have more than one Nash equilibrium.

III

(Figure 12.1) The Nash equilibrium of this game is:

Low, Up.

Which figure corresponds to the following normal-form game? Firm B Advertise Don't Advertise Firm A Advertise 16, 16 30, 12 Don't Advertise 12, 30 24, 24

Panel D

(Table 12.5) Payoffs represent profits in millions of dollars. In a Nash equilibrium, Sports Illustrated will run the _____ cover story and ESPN Magazine will run the _____ cover story.

Tim Tebow; Brett Favre

(Table 12.15) The table shows the strategies of two players playing prisoner's dilemma. What is player A's strategy?

Tit-for-tat

(Figure 12.10) In the figure, payoffs are profits in millions of dollars. Suppose that Feely cannot develop an antibedbug mattress because of Mealy's patented technology. Should Mealy develop and release its antibedbug mattress?

Yes, Mealy will earn $13 million and Feely will earn $3 million.

(Table 12.5) Payoffs represent profits in millions of dollars. What is ESPN's dominant strategy?

none