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

What is true about the following payoff matrix? A: cooperate A: not cooperate B: cooperate A: 2, B: 2 A: 5, B: 5 B: do not cooperate A: 3, B: 1 A: 0, B: 0

The rationality assumptions of game theory:

In experiments testing game theory, cheap talk does not affect the outcome of a game.

A sequential game is one where:

Formal economic reasoning applied to situations in which decisions are interdependent is called:

If a player has a dominant strategy, that player will always win the game.

Why is the standard model of economic choice relevant even if the findings of behavioral economists are true for many individuals?

The prisoner's dilemma is an example of a:

What is meant by "cheap talk"? Does it influence the outcome of games?

What is the difference between sequential games and simultaneous move games? Give an example of each type of game.

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

What is a "non-cooperative" game?

When some people do not act rationally, others can profit from that irrationality.

The prisoner's dilemma provides an explanation of why detectives interview suspects separately in television crime shows.

Assuming the standard assumptions, in an infinitely long repeated-play ultimatum game, the second player's best strategy is most likely to:

In a sequential game:

Describe an experiment that demonstrated endowment effects.

Game theory:

"Leaving money on the table" refers to the potential gains to be made when people act irrationally.

How does a dominant strategy differ from a mixed strategy? Give examples of each type of strategy.