Question 1

The ability to make counteroffers transforms bargaining from a game in which ___________ trumps everything to a game in which ____________ is the winning strategy.

Accepted Answer

A)  first-mover advantage;patience
B)  patience;first-mover advantage
C)  commitment strategy;self-interested behavior
D)  first-mover advantage;cooperationE) A) and D)
F) B) and D)

Question 2

In a game of bargaining,those who _______________ will likely get the highest payoff.

Accepted Answer

A)  are patient
B)  are cooperative
C)  have a commitment strategy
D)  colludeE) None of the above
F) A) and C)

Question 3

In the prisoner's dilemma game:

Accepted Answer

A)  a cooperative strategy can lead to a 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.E) A) and B)
F) A) and C)

Question 4

An example of a payoff would be:

Accepted Answer

A)  a salary.
B)  winning an election.
C)  having clean drinking water.
D)  All of these are examples of payoffs.E) A) and B)
F) A) and C)

Question 5

Two players who are both playing tit-for-tat can quickly find their way toward:

Accepted Answer

A)  lasting cooperation.
B)  noncooperative outcomes for the remaining rounds.
C)  a cycle of cooperation and noncooperation,similar to a business cycle.
D)  None of these statements is true.E) C) and D)
F) B) and C)

Question 6

Once a Nash equilibrium has been found in a game:

Accepted Answer

A)  a stable outcome is impossible.
B)  the players have no incentive to change their choice.
C)  the players always have an incentive to change their choice.
D)  no one in the game can be made better off.E) B) and D)
F) B) and C)

Question 7

In the real world,it is likely that wage negotiations:

Accepted Answer

A)  do not drag on for years.
B)  drag on for years to see which side is more patient.
C)  often end with the company enjoying a larger payoff,since they can afford to be more patient.
D)  often end with the worker's enjoying a larger payoff,since they are not losing as much in profit as the company.E) A) and D)
F) All of the above

Question 8

For players in a repeated-play game to achieve cooperation:

Accepted Answer

A)  there is no need to enter into public commitment strategies or explicit agreements.
B)  the players must reach an explicit agreement to cooperate.
C)  the players need not explicitly state an agreement to cooperate,but must publicly display a commitment strategy.
D)  None of these statements is true.E) All of the above
F) A) and D)

Question 9

When one person or company has to make a decision before the other in a game,it is called a:

Accepted Answer

A)  sequential game.
B)  commitment strategy.
C)  simultaneous game.
D)  prisoner's dilemma.E) A) and D)
F) C) and D)

Question 10

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

Accepted Answer

A)  collusion;competition
B)  competition;collusion
C)  commitment strategy;collusion
D)  collusion;commitment strategyE) A) and B)
F) C) and D)

Question 11

Payoffs are:

Accepted Answer

A)  the rewards that come from particular actions.
B)  always monetary.
C)  only get enjoyed by the winner.
D)  payments made to gain some advantage unfairly during a game.E) A) and D)
F) B) and C)

Question 12

When your outcomes depend on another's choices,asking __________________ is the key to good decision making.

Accepted Answer

A)  how will others respond
B)  what the wants and constraints are of those involved
C)  what the trade-offs are
D)  why everyone isn't already doing itE) C) and D)
F) All of the above

Question 13

Reaching a Nash equilibrium means that:

Accepted Answer

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 is true.E) B) and C)
F) All of the above

Question 14

Having a commitment strategy in the business world is called:

Accepted Answer

A)  collusion.
B)  competitive cooperation.
C)  predatory pricing.
D)  competition.E) A) and D)
F) A) and C)

Question 15

A decision matrix:

Accepted Answer

A)  summarizes the choices and payoffs associated with the prisoner's dilemma game.
B)  outlines the clear outcome of any strategy-based game.
C)  shows only the decisions of one player.
D)  cannot be useful in evaluating the strategy choices.E) None of the above
F) All of the above

Question 16

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

Question 17

The prisoner's dilemma:

Accepted Answer

A)  can be summarized in a payoff matrix.
B)  can involve two players.
C)  leads to a less-than-ideal outcome for all players.
D)  All of these statements are true.E) B) and C)
F) A) and D)

Question 18

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

Accepted Answer

A)  behaving strategically.
B)  taking into consideration the actions of others.
C)  acting in your own self-interest.
D)  All of these statements are true.E) A) and B)
F) A) and C)

Question 19

All games involve which of the following?

Accepted Answer

A)  Payoffs
B)  A predictable outcome
C)  Full information
D)  A game masterE) None of the above
F) B) and C)

Question 20

Explicit agreements between businesses to keep prices high:

Accepted Answer

A)  are illegal.
B)  are called collusion.
C)  are not in the public's best interests.
D)  All of these statements are true.E) C) and D)
F) A) and D)

Exam 9: Game Theory and Strategic Thinking

The ability to make counteroffers transforms bargaining from a game in which ___________ trumps everything to a game in which ____________ is the winning strategy.

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Explicit agreements between businesses to keep prices high:

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In a game of bargaining,those who _______________ will likely get the highest payoff.

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Two players who are both playing tit-for-tat can quickly find their way toward:

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The prisoner's dilemma:

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Having a commitment strategy in the business world is called:

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All games involve which of the following?

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When one person or company has to make a decision before the other in a game,it is called a:

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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:

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A decision matrix:

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In the real world,it is likely that wage negotiations:

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

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Once a Nash equilibrium has been found in a game:

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In the prisoner's dilemma game:

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

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Reaching a Nash equilibrium means that:

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An example of a payoff would be:

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When your outcomes depend on another's choices,asking __________________ is the key to good decision making.

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Payoffs are:

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For players in a repeated-play game to achieve cooperation:

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The ability to make counteroffers transforms bargaining from a game in which _ trumps everything to a game in which __ is the winning strategy.

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

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