Question 1

The outcome with the highest payoff will also have the highest utility.

Accepted Answer

A) True 
 B)False

Question 2

A game has a pure strategy solution when both players' single-best strategies are the same.

Accepted Answer

A) True 
 B)False

Question 3

A risk avoider will have a concave utility function.

Accepted Answer

A) True 
 B)False

Question 4

A 3 x 3 two-person zero-sum game that has no optimal pure strategy and no dominated strategies

Accepted Answer

A) can be solved using a linear programming model. 
B) can be solved algebraically. 
C) can be solved by identifying the minimax and maximin values. 
D) cannot be solved. 
A) can be solved using a linear programming model. 
B) can be solved algebraically. 
C) can be solved by identifying the minimax and maximin values. 
D) cannot be solved.

Question 5

Consider the following two-person zero-sum game.Assume the two players have the same three strategy options.The payoff table below shows the gains for Player A.
   Is there an optimal pure strategy for this game? If so,what is it? If not,can the mixed-strategy probabilities be found algebraically? What is the value of the game?

Accepted Answer

There is not an optimal pure strategy.St

Question 6

The expected utility is the utility of the expected monetary value.

Accepted Answer

A) True 
 B)False

Question 7

To assign utilities,consider the best and worst payoffs in the entire decision situation.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements about a dominated strategy is false?

Accepted Answer

A) A dominated strategy will never be selected by a player. 
B) A dominated strategy exists if another strategy is at least as good regardless of what the opponent does. 
C) A dominated strategy is superior to a mixed strategy. 
D) A dominated strategy can be eliminated from the game. 
A) A dominated strategy will never be selected by a player. 
B) A dominated strategy exists if another strategy is at least as good regardless of what the opponent does. 
C) A dominated strategy is superior to a mixed strategy. 
D) A dominated strategy can be eliminated from the game.

Question 9

Consider the following two-person zero-sum game.Assume the two players have the same three strategy options.The payoff table below shows the gains for Player A.
   Is there an optimal pure strategy for this game? If so,what is it? If not,can the mixed-strategy probabilities be found algebraically? What is the value of the game?

Accepted Answer

There is not an optimal pure strategy.
H

Question 10

Consider the following two-person zero-sum game.Assume the two players have the same two strategy options.The payoff table shows the gains for Player A.
   Determine the optimal strategy for each player.What is the value of the game?

Accepted Answer

The optimal mixed strategy solution for

Question 11

Utility reflects the decision maker's attitude toward

Accepted Answer

A) probability and profit 
B) profit,loss,and risk 
C) risk and regret 
D) probability and regret 
A) probability and profit 
B) profit,loss,and risk 
C) risk and regret 
D) probability and regret

Question 12

If the maximin and minimax values are not equal in a two-person zero-sum game,

Accepted Answer

A) a mixed strategy is optimal. 
B) a pure strategy is optimal. 
C) a dominated strategy is optimal. 
D) one player should use a pure strategy and the other should use a mixed strategy. 
A) a mixed strategy is optimal. 
B) a pure strategy is optimal. 
C) a dominated strategy is optimal. 
D) one player should use a pure strategy and the other should use a mixed strategy.

Question 13

The expected utility approach

Accepted Answer

A) does not require probabilities. 
B) leads to the same decision as the expected value approach. 
C) is most useful when excessively large or small payoffs are possible. 
D) requires a decision tree. 
A) does not require probabilities. 
B) leads to the same decision as the expected value approach. 
C) is most useful when excessively large or small payoffs are possible. 
D) requires a decision tree.

Question 14

The purchase of insurance and lottery tickets shows that people make decisions based on

Accepted Answer

A) expected value. 
B) sample information. 
C) utility. 
D) maximum likelihood. 
A) expected value. 
B) sample information. 
C) utility. 
D) maximum likelihood.

Question 15

Chez Paul is contemplating either opening another restaurant or expanding its existing location.The payoff table for these two decisions is:
   Paul has calculated the indifference probability for the lottery having a payoff of $160,000 with probability p and -$80,000 with probability (1-p)as follows:
   
a.Is Paul a risk avoider,a risk taker,or risk neutral?
b.Suppose Paul has defined the utility of -$80,000 to be 0 and the utility of $160,000 to be 80.What would be the utility values for -$40,000,$20,000,and $100,000 based on the indifference probabilities?
c.Suppose P(s1)= .4,P(s2)= .3,and P(s3)= .3.Which decision should Paul make? Compare with the decision using the expected value approach.

Accepted Answer

a.A risk avoider
b.Amount Util

Question 16

A game has a saddle point when pure strategies are optimal for both players.

Accepted Answer

A) True 
 B)False

Question 17

Given two decision makers,one risk neutral and the other a risk avoider,the risk avoider will always give a lower utility value for a given outcome.

Accepted Answer

A) True 
 B)False

Question 18

The expected monetary value approach and the expected utility approach to decision making usually result in the same decision choice unless extreme payoffs are involved.

Accepted Answer

A) True 
 B)False

Question 19

Expected utility is a particularly useful tool when payoffs stay in a range considered reasonable by the decision maker.

Accepted Answer

A) True 
 B)False

Question 20

The utility function for a risk avoider typically shows a diminishing marginal return for money.

Accepted Answer

A) True 
 B)False

The outcome with the highest payoff will also have the highest utility.

A game has a pure strategy solution when both players' single-best strategies are the same.

A risk avoider will have a concave utility function.

A 3 x 3 two-person zero-sum game that has no optimal pure strategy and no dominated strategies

The expected utility is the utility of the expected monetary value.

To assign utilities,consider the best and worst payoffs in the entire decision situation.

Which of the following statements about a dominated strategy is false?

Consider the following two-person zero-sum game.Assume the two players have the same two strategy options.The payoff table shows the gains for Player A. Determine the optimal strategy for each player.What is the value of the game?

Utility reflects the decision maker's attitude toward

If the maximin and minimax values are not equal in a two-person zero-sum game,

The expected utility approach

The purchase of insurance and lottery tickets shows that people make decisions based on

A game has a saddle point when pure strategies are optimal for both players.

Given two decision makers,one risk neutral and the other a risk avoider,the risk avoider will always give a lower utility value for a given outcome.

The expected monetary value approach and the expected utility approach to decision making usually result in the same decision choice unless extreme payoffs are involved.

Expected utility is a particularly useful tool when payoffs stay in a range considered reasonable by the decision maker.

The utility function for a risk avoider typically shows a diminishing marginal return for money.

Introduction

Introduction to Probability

Probability Distributions

Decision Analysis

Forecasting

Introduction to Linear Programming

Lp Sensitivity Analysis and Interpretation of Solution

Linear Programming Applications

Distribution and Network Problems

Integer Linear Programming

Advanced Optimization Application

Project Scheduling: Pertcpm

Inventory Models

Waiting Line Models

Simulation

Markov Processes

Filters

Exam 5: Utility and Game Theory

The outcome with the highest payoff will also have the highest utility.

A game has a pure strategy solution when both players' single-best strategies are the same.

A risk avoider will have a concave utility function.

A 3 x 3 two-person zero-sum game that has no optimal pure strategy and no dominated strategies

The expected utility is the utility of the expected monetary value.

To assign utilities,consider the best and worst payoffs in the entire decision situation.

Which of the following statements about a dominated strategy is false?

Consider the following two-person zero-sum game.Assume the two players have the same two strategy options.The payoff table shows the gains for Player A. Determine the optimal strategy for each player.What is the value of the game?

Utility reflects the decision maker's attitude toward

If the maximin and minimax values are not equal in a two-person zero-sum game,

The expected utility approach

The purchase of insurance and lottery tickets shows that people make decisions based on

A game has a saddle point when pure strategies are optimal for both players.

Given two decision makers,one risk neutral and the other a risk avoider,the risk avoider will always give a lower utility value for a given outcome.

The expected monetary value approach and the expected utility approach to decision making usually result in the same decision choice unless extreme payoffs are involved.

Expected utility is a particularly useful tool when payoffs stay in a range considered reasonable by the decision maker.

The utility function for a risk avoider typically shows a diminishing marginal return for money.

Introduction

Introduction to Probability

Probability Distributions

Decision Analysis

Forecasting

Introduction to Linear Programming

Lp Sensitivity Analysis and Interpretation of Solution

Linear Programming Applications

Distribution and Network Problems

Integer Linear Programming

Advanced Optimization Application

Project Scheduling: Pertcpm

Inventory Models

Waiting Line Models

Simulation

Markov Processes

Filters