1.4 quiz

Anthony loves going to the opera while Becky loves watching football. The following is the payoff table for their choice of activity: For example if Anthony chooses opera and Becky chooses football, then the activities are valued at $10 to Anthony and $20 to Becky. Assume that they can only choose one activity (i.e. they cannot randomize). Based on this information, which of the following statements is correct?

If Anthony offers $20 to Becky for coming to the opera with him, then (Opera, Opera) may be chosen.

Which of the following statements regarding Nash equilibrium are correct?

In a Nash equilibrium, all players choose their best response strategy given the other players' strategies.

Consider an ultimatum game of sharing a pie of $100. The first table shows the cumulative percentage of the Responders who accept the amount offered by the Proposers for when the game was played with two separate groups (Kenyan farmers and US university students). The second table shows the percentage of the Proposers who made those offers in the two groups. Based on this information, which of the following statements is correct?

In both groups, the highest proportion of Proposers offered the amount that maximized their expected payoff.

According to Elinor Ostrom, which of the following statements about the problem of tragedy of the commons are correct?

Social norms can be drawn on to enforce sustainable resources, although it does not always succeed.

Which of the following is a non-excludable public good?

Streetlights

Consider an ultimatum game where the Proposer has $100 and offers a proportion of it to the Responder, who can either accept or reject the offer. If the Responder accepts, both the Proposer and the Responder keep the agreed share, while if the Responder rejects, then both receive nothing. Which of the following statements is correct?

The Responder should not accept any offer less than $60.

Which of the following statements regarding social preferences is correct?

Altruism is an example of social preferences.

Consider the following four games where players Row and Column each have two strategies: A and B. Which of the following games illustrates a prisoners' dilemma?

This is a prisoners' dilemma because there is a single Nash equilibrium, (B, B), and this dominant strategy equilibrium is worse for both players than if both players played the strategy A.