Question 1

Cheap talk

Accepted Answer

A) is never credible. 
B) is illegal. 
C) generally affects the game's payoffs. 
D) can be credible when both firms have an incentive to be truthful. 
A) is never credible. 
B) is illegal. 
C) generally affects the game's payoffs. 
D) can be credible when both firms have an incentive to be truthful.

Question 2

A dominant strategy

Accepted Answer

A) maximizes the joint profit of the players in the game. 
B) is the player's best response to all possible strategies of the other player. 
C) cannot exist when there is a Nash equilibrium. 
D) only exists when the game is limited to two players. 
A) maximizes the joint profit of the players in the game. 
B) is the player's best response to all possible strategies of the other player. 
C) cannot exist when there is a Nash equilibrium. 
D) only exists when the game is limited to two players.

Question 3

An auction in which the price announced by the auctioneer DESCENDS is called a(n)

Accepted Answer

A) Dutch Auction. 
B) English Auction. 
C) Sealed Bid Auction. 
D) Descending Option Auction. 
A) Dutch Auction. 
B) English Auction. 
C) Sealed Bid Auction. 
D) Descending Option Auction.

Question 4

In the example of coordination problems between Google and Motorola Mobility, one method to solve the problems was

Accepted Answer

A) to undertake a merger or acquisition. 
B) form a joint venture. 
C) for one firm to subcontract with the other. 
D) All of the above. 
A) to undertake a merger or acquisition. 
B) form a joint venture. 
C) for one firm to subcontract with the other. 
D) All of the above.

Question 5

Explain why it is unwise to bid more than your valuation of the good in a sealed bid second-price auction.

Accepted Answer

Assume you have a valuation of the good

Question 6

In a two-player simultaneous game, if player A has a dominant strategy and player B does not, player B will

Accepted Answer

A) employ a mixed strategy. 
B) choose his best strategy assuming that player A plays her dominant strategy. 
C) not achieve a Nash equilibrium. 
D) assume that player A does not choose her dominant strategy. 
A) employ a mixed strategy. 
B) choose his best strategy assuming that player A plays her dominant strategy. 
C) not achieve a Nash equilibrium. 
D) assume that player A does not choose her dominant strategy.

Question 7

If a firm does NOT know its rival's profit function, then we consider that information to be

Accepted Answer

A) irrelevant in deciding its best strategy. 
B) private. 
C) common knowledge. 
D) Pareto sub-optimal. 
A) irrelevant in deciding its best strategy. 
B) private. 
C) common knowledge. 
D) Pareto sub-optimal.

Question 8

In a bargaining solution, a player's net surplus is

Accepted Answer

A) the amount of total surplus minus any deadweight loss. 
B) the difference between what the player receives in the final bargain minus what she would have gotten from the disagreement point. 
C) the amount of consumer surplus she receives minus any deadweight loss. 
D) always maximized. 
A) the amount of total surplus minus any deadweight loss. 
B) the difference between what the player receives in the final bargain minus what she would have gotten from the disagreement point. 
C) the amount of consumer surplus she receives minus any deadweight loss. 
D) always maximized.

Question 9

Which of the following statements is TRUE about a non-cooperative game?

Accepted Answer

A) When two players each have a dominant strategy, joint profits may not be maximized. 
B) When two players each have a dominant strategy, joint profits are maximized. 
C) When players use their best responses, joint profits are maximized. 
D) None of the above. 
A) When two players each have a dominant strategy, joint profits may not be maximized. 
B) When two players each have a dominant strategy, joint profits are maximized. 
C) When players use their best responses, joint profits are maximized. 
D) None of the above.

Question 10

-The above figure shows a payoff matrix for two firms, A and B, that must choose between a high-price strategy and a low-price strategy. The Nash equilibrium in this game

Accepted Answer

A) does not exist. 
B) occurs when both firms set a low price. 
C) occurs when both firms set a high price. 
D) occurs when firm A sets a high price and firm B sets a low price. 
A) does not exist. 
B) occurs when both firms set a low price. 
C) occurs when both firms set a high price. 
D) occurs when firm A sets a high price and firm B sets a low price.

Cheap talk

A dominant strategy

An auction in which the price announced by the auctioneer DESCENDS is called a(n)

In the example of coordination problems between Google and Motorola Mobility, one method to solve the problems was

Explain why it is unwise to bid more than your valuation of the good in a sealed bid second-price auction.

In a two-player simultaneous game, if player A has a dominant strategy and player B does not, player B will

If a firm does NOT know its rival's profit function, then we consider that information to be

In a bargaining solution, a player's net surplus is

Which of the following statements is TRUE about a non-cooperative game?

-The above figure shows a payoff matrix for two firms, A and B, that must choose between a high-price strategy and a low-price strategy. The Nash equilibrium in this game

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 12: Game Theory and Business Strategy

Cheap talk

A dominant strategy

An auction in which the price announced by the auctioneer DESCENDS is called a(n)

In the example of coordination problems between Google and Motorola Mobility, one method to solve the problems was

Explain why it is unwise to bid more than your valuation of the good in a sealed bid second-price auction.

In a two-player simultaneous game, if player A has a dominant strategy and player B does not, player B will

If a firm does NOT know its rival's profit function, then we consider that information to be

In a bargaining solution, a player's net surplus is

Which of the following statements is TRUE about a non-cooperative game?

-The above figure shows a payoff matrix for two firms, A and B, that must choose between a high-price strategy and a low-price strategy. The Nash equilibrium in this game

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters