Question 1

In a mixed strategy:

Accepted Answer

A)  the payoffs are mixed during each round.
B)  the order of who chooses first is mixed.
C)  moves can be predicted.
D)  players try to avoid demonstrating a pattern.E) All of the above
F) B) and C)

Question 2

The best strategy for each player if this game is repeated is:   A: Cheat  A: Collaborate  B: Cheat  A: 1, B: −1 A: −1, B: 1 B: Collaborate  A: −1, B:1  A: 1, B: −1\begin{array} { | l | l | c | } \hline & 	ext { A: Cheat } & 	ext { A: Collaborate } \\hline 	ext { B: Cheat } & 	ext { A: } 1 , 	ext { B: } - 1 & 	ext { A: } - 1 , 	ext { B: } 1 \\hline 	ext { B: Collaborate } & 	ext { A: } - 1 , 	ext { B:1 } & 	ext { A: } 1 , 	ext { B: } - 1 \\hline\end{array} B: Cheat  B: Collaborate ​ A: Cheat  A: 1, B: −1 A: −1, B:1 ​ A: Collaborate  A: −1, B: 1 A: 1, B: −1​​

Accepted Answer

A)  his or her dominant strategy.
B)  a mixed strategy.
C)  to cheat.
D)  to collaborate. E) None of the above
F) A) and B)

Question 3

Informal game theory:

Accepted Answer

A)  relies on deductive logic.
B)  shows how the Nash equilibrium is reached.
C)  assumes people calculate their optimal strategy.
D)  considers how people actually think and behave.E) A) and D)
F) B) and D)

Question 4

Strategic reasoning applies to situations in which decisions are interdependent.

Accepted Answer

A) True 
 B)False

Question 5

Why do behavioral economists use experiments in which people play formal games?

Accepted Answer

Behavioral economists use expe...

Question 6

Assuming the standard assumptions, in a single-play ultimatum game, the second player's best strategy in the last round is to:

Accepted Answer

A)  reject all but evenly split offers.
B)  accept any offer greater than zero.
C)  accept only those offers over 50 percent of the total.
D)  reject all offers.E) A) and B)
F) A) and C) B

Question 7

What is true about the following payoff matrix?   A: not cooperate  A: cooperate  B: do not cooperate  A: 2, B:2 A: 1, B: 3 B: cooperate  A: 3, B:1 A: 0, B: 0\begin{array} { | l | l | c | } \hline & { 	ext { A: not cooperate } } & 	ext { A: cooperate } \\hline 	ext { B: do not cooperate } & 	ext { A: } 2 , \mathrm {~B} : 2 & 	ext { A: } 1 , 	ext { B: } 3 \\hline 	ext { B: cooperate } & 	ext { A: } 3 , \mathrm {~B} : 1 & 	ext { A: } 0 , 	ext { B: } 0 \\hline\end{array} B: do not cooperate  B: cooperate ​ A: not cooperate  A: 2, B:2 A: 3, B:1​ A: cooperate  A: 1, B: 3 A: 0, B: 0​​

Accepted Answer

A)  Players cannot jointly do better by cooperating.
B)  Players cannot escape the 0-0 payoff.
C)  Player A is better off lying that he will not cooperate and then cooperate.
D)  Player B is better off lying that she will not cooperate and then cooperate. E) B) and C)
F) A) and B)

Question 8

A Nash equilibrium assumes that a player follows his or her best strategy:

Accepted Answer

A)  given that the other players follow a random strategy.
B)  given that the other players follow their worst strategy.
C)  given that the other players follow their best strategy.
D)  regardless of what other players do.E) B) and C)
F) C) and D)

Question 9

TV crime shows illustrate the prisoner's dilemma when the:

Accepted Answer

A)  judge ponders the sentence for the crimes.
B)  prisoners go to prison for the first time.
C)  police interview suspects in the same room.
D)  police interview suspects in different rooms.E) B) and D)
F) All of the above D

Question 10

Why might the economy as a whole conform to the predictions of a model even if not all people are rational?

Accepted Answer

A)  The standard model doesn't assume rationality.
B)  People who are rational will profit from those who are not.
C)  People who are irrational will profit from those who are not.
D)  It won't; for the standard model to work, all people must be rational.E) None of the above
F) All of the above

Question 11

Give an example of the prisoner's dilemma game.

Accepted Answer

The standard prisoner's dilemma game can...

Question 12

What is a cooperative game?

Accepted Answer

Cooperative games are games in...

Question 13

Consider the following payoff matrix facing two criminals.   A: Confess  A: Not Confess  B: Confess  A: 20yrs, B: 20yrs  A: 50yrs, B: 2yrs  B: Not Confess  A: 2yrs, B: 50yrs  A: 10yrs, B: 10yrs \begin{array} { | l | l | l | } \hline & { 	ext { A: Confess } } & 	ext { A: Not Confess } \\hline 	ext { B: Confess } & 	ext { A: 20yrs, B: 20yrs } & 	ext { A: 50yrs, B: 2yrs } \\hline 	ext { B: Not Confess } & 	ext { A: 2yrs, B: 50yrs } & 	ext { A: 10yrs, B: 10yrs } \\hline\end{array} B: Confess  B: Not Confess ​ A: Confess  A: 20yrs, B: 20yrs  A: 2yrs, B: 50yrs ​ A: Not Confess  A: 50yrs, B: 2yrs  A: 10yrs, B: 10yrs ​​  Their options are to confess or not to confess. The payoffs represent the number of years each will spend in jail. The Nash equilibrium for the payoff matrix shown is:

Accepted Answer

A)  A: 20 years, B: 20 years.
B)  A: 50 years, B: 2 years.
C)  A: 2 years, B: 50 years.
D)  A: 10 years, B: 10 years. E) A) and D)
F) None of the above

Question 14

A Nash equilibrium:

Accepted Answer

A)  will always be reached.
B)  is always reached in game playing.
C)  sometimes may not be reached because people assume others react rationally.
D)  sometimes may not be reached because people do not assume that others act rationally.E) A) and D)
F) A) and B)

Question 15

"Framing effects" suggest that the wording of questions affects people's survey responses.

Accepted Answer

A) True 
 B)False

Question 16

In the two-thirds game, in which you choose a number between 1 and 100 that is two-thirds of the average chosen by the group, the rollback strategy is to:

Accepted Answer

A)  choose a number randomly.
B)  be the last person to choose a number.
C)  be the first person to choose a number.
D)  choose zero.E) A) and B)
F) B) and C) D

Question 17

The equilibrium solution for the following payoff matrix is:   A  A  B  A: −1,B:−1 A: 5,B:0 B  A: 2,B:2 A: 10, B: 1\begin{array}{|l|l|l|}\hline & {	ext { A }} &  {	ext { A }} \\hline 	ext { B } & 	ext { A: }-1, B:-1 & 	ext { A: } 5, B: 0 \\hline 	ext { B } & 	ext { A: } 2, B: 2 & 	ext { A: } 10, 	ext { B: } 1 \\hline\end{array} B  B ​ A  A: −1,B:−1 A: 2,B:2​ A  A: 5,B:0 A: 10, B: 1​​

Accepted Answer

A)  ?1, ?1.
B)  5, 0.
C)  2, 2.
D)  10, 1. E) All of the above
F) A) and D)

Question 18

Why is game theory more flexible than standard models of market behavior?

Accepted Answer

Game theory is a highly flexible tool th...

Question 19

Most games in real life:

Accepted Answer

A)  require intuition, common sense, and calculations.
B)  require a mixed strategy.
C)  require a rollback strategy.
D)  have a best solution.E) B) and D)
F) A) and C)

Question 20

Backward induction will not lead to a determinate sequence of actions for:

Accepted Answer

A)  games with dominant strategies.
B)  sequential games.
C)  simultaneous move games.
D)  mixed strategy games.E) A) and D)
F) B) and D)

Exam 20: Game Theory, Strategic Decision Making, and Behavioral Economics

In a mixed strategy:

Correct Answer
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Correct Answer
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Informal game theory:

Correct Answer
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Strategic reasoning applies to situations in which decisions are interdependent.

Correct Answer
verified

Why do behavioral economists use experiments in which people play formal games?

Correct Answer
verified
Behavioral economists use expe...
View Answer

Assuming the standard assumptions, in a single-play ultimatum game, the second player's best strategy in the last round is to:

Correct Answer
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B

Correct Answer
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A Nash equilibrium assumes that a player follows his or her best strategy:

Correct Answer
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TV crime shows illustrate the prisoner's dilemma when the:

Correct Answer
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D

Why might the economy as a whole conform to the predictions of a model even if not all people are rational?

Correct Answer
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Give an example of the prisoner's dilemma game.

Correct Answer
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The standard prisoner's dilemma game can...
View Answer

What is a cooperative game?

Correct Answer
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Cooperative games are games in...
View Answer

Correct Answer
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A Nash equilibrium:

Correct Answer
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"Framing effects" suggest that the wording of questions affects people's survey responses.

Correct Answer
verified

In the two-thirds game, in which you choose a number between 1 and 100 that is two-thirds of the average chosen by the group, the rollback strategy is to:

Correct Answer
verified
D

The equilibrium solution for the following payoff matrix is: $\begin{array}{|l|l|l|}\hline & {\text { A }} & {\text { A }} \\\hline \text { B } & \text { A: }-1, B:-1 & \text { A: } 5, B: 0 \\\hline \text { B } & \text { A: } 2, B: 2 & \text { A: } 10, \text { B: } 1 \\\hline\end{array}$

Correct Answer
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Why is game theory more flexible than standard models of market behavior?

Correct Answer
verified
Game theory is a highly flexible tool th...
View Answer

Most games in real life:

Correct Answer
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Backward induction will not lead to a determinate sequence of actions for:

Correct Answer
verified

Exam 20: Game Theory, Strategic Decision Making, and Behavioral Economics

In a mixed strategy:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Informal game theory:

Correct AnswerverifiedShow Answer

Strategic reasoning applies to situations in which decisions are interdependent.

Correct AnswerverifiedShow Answer

Why do behavioral economists use experiments in which people play formal games?

Correct AnswerverifiedBehavioral economists use expe...View AnswerShow Answer

Assuming the standard assumptions, in a single-play ultimatum game, the second player's best strategy in the last round is to:

Correct AnswerverifiedB

Correct AnswerverifiedShow Answer

A Nash equilibrium assumes that a player follows his or her best strategy:

Correct AnswerverifiedShow Answer

TV crime shows illustrate the prisoner's dilemma when the:

Correct AnswerverifiedD

Why might the economy as a whole conform to the predictions of a model even if not all people are rational?

Correct AnswerverifiedShow Answer

Give an example of the prisoner's dilemma game.

Correct AnswerverifiedThe standard prisoner's dilemma game can...View AnswerShow Answer

What is a cooperative game?

Correct AnswerverifiedCooperative games are games in...View AnswerShow Answer

Correct AnswerverifiedShow Answer

A Nash equilibrium:

Correct AnswerverifiedShow Answer

"Framing effects" suggest that the wording of questions affects people's survey responses.

Correct AnswerverifiedShow Answer

In the two-thirds game, in which you choose a number between 1 and 100 that is two-thirds of the average chosen by the group, the rollback strategy is to:

Correct AnswerverifiedD

Correct AnswerverifiedShow Answer

Why is game theory more flexible than standard models of market behavior?

Correct AnswerverifiedGame theory is a highly flexible tool th...View AnswerShow Answer

Most games in real life:

Correct AnswerverifiedShow Answer

Backward induction will not lead to a determinate sequence of actions for:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Behavioral economists use expe...
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Correct Answer
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B

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Correct Answer
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Correct Answer
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D

Correct Answer
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Correct Answer
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The standard prisoner's dilemma game can...
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Correct Answer
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Cooperative games are games in...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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D

Correct Answer
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Correct Answer
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Game theory is a highly flexible tool th...
View Answer

Correct Answer
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Correct Answer
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