Chapter 9: Game theory (econ)

B

Collusion : A. occurs only when no dominant strategy is present B. can occur when dominant strategies are present for both players C. is observed, but economists cannot theoretically model it. D. is a theoretical concept that is rarely observed

D

Commitment strategies: A. are not necessary to reach a mutually beneficial equilibrium in repeated games b. are often needed to reach a mutually beneficial equilibrium in single-round games C usually fail in work D. are not observed in reality

B

Games with a noncooperative equilibrium: A. always result in a negative-negative outcome B. always result in either a positive-positive or negative-negative outcome c. always result in a positive-positive outcome D. always result in a positive-negative outcome (zero-sum)

C

Games: A only have one outcome possible B with non cooperative equilibrium are always negative-negative outcomes C. may have several stable outcomes D. Must have a dominant strategy present to reach a stable equilibrium

D

Games: A. don't need a dominant strategy present in order to reach an equilibrium outcome B. may have noncooperative equilibrium that are positive-positive outcome C. may have several stable outcomes D all of these statements are true

A

In repeated games: A. a cooperative outcome is more likely than in a single game B. a noncooperative outcome is more likely than in a single game C a cooperative never happens D. players always cooperate and enjoy a mutually beneficial equilibrium

D

In the prisoner's dilemma game: A. a negative-negative outcome can be predicted B. a dominant strategy exists for both players C. a noncooperative equilibrium can be predicted D. all these statements are true

A

In the prisoner's dilemma: A. a cooperative strategy can lead to more beneficial outcome for both players B. a noncooperative strategy will lead to a positive-positive outcome C. a stable outcome is impossible D. neither player has a dominant strategy

A

When one person or compant has to make a decision before the other in a game, it is called a: A sequential game B commitment strategy C simultaneous game d prisoner's dilemma

finitely repeated games

a game which is repeated a (potentially) infinite number of times

A

a noncooperative equilibrium is one in which: A. the participants act independently, pursuing only their individual interests. B. always results in a negative- negative outcome C. Will only be reached if a dominant strategy exists for both players D all of these statements are true

dominant strategy

a strategy that is best for a player in a game regardless of the strategies chosen by the other players

A

a tit for tat strategy is: A. one in which a player is repeated game takes the same action that his/her opponent did in the previous round B. one in which both players explicitly agree to compete in the first round of a repeated game, and if one of them cooperates, the other will defect C. not effective in prisoner's dilemma type games D. all of these statements are true

C

cooperative equilibriums: A. are impossible to reach in real life B. never occur unless players act in their own self-interest C. none of these statements are true D. never result in positive-positive outcomes

collusion

economic agents formally agree to coordinate their activities to increase their joint profit/benefit

A

for a commitment strategy to work: A. the punishment must be so bad that it outweighs the incentive to defect in the game B. The punishment must be immediately after the game is played C. both players must agree to a punishment D. no player may have a dominant strategy

one shot games

games that are played only one time

focus point

in one Nash equilibrium dominates the other, players may try to attain the best Nash Equilibrium

A

reaching a Nash equilibrium means that: A. a stable outcome has been reached B. there is no stable outcome to the game C. the players will never reach a positive-positive outcome D. none of these statements are true

Decision matrix

shows every possible combination of payoffs given players strategies

Nash equilibrium

situation in which economic actors interacting with one another each chooses their best strategy given that strategies that all other have chosen "no regrets"

game theory

study of interacting decision makers whose payoffs depend on the actions of both

backward unraveling

the players' failure to sustain the cooperative outcome in a finitely repeated game, even for a single stage

C

the prisoner's dilemma can be summarized in: A a strategy matrix B a strategy tree C a decision matrix D a flowchart

A

when all players in a game choose the best strategy they can, given the choices of all other players it is always a: A nash equilibrium B Positive-positive outcome C. noncooperative equilibrium D. negative-negative equilibrium