chp 14 test bank - CHAPTER 14GAME THEORY AND COMPETITIVE...

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Unformatted text preview: CHAPTER 14GAME THEORY AND COMPETITIVE STRATEGY MULTIPLE CHOICE 1. In a game: a. there can be no more than two players. b. agents strive to maximize their expected utility c. payoffs are wholly determined by each player's own course of action d. decision makers must take into account the reasoning of each other. ANS: D 2. Because any profit recorded by the buyer of an option is exactly matched by the seller's loss, options can be described as a: a. cooperative game. b. positive-sum game. c. negative-sum game. d. zero-sum game. ANS: D 3. When bidders on a government contract collude to divide markets and eliminate uncertainty, their col- lusion can be describes as a: a. cooperative game. b. positive-sum game. c. zero-sum game. d. nonstrategic game. ANS: A 4. Joint action is favored in: a. cooperative games. b. positive-sum games. c. negative-sum games. d. zero-sum games. ANS: A 5. The general principle for players in a sequential game is to: a. look ahead and extrapolate back. b. trigger a sequence of irrational responses from competitors c. trigger a sequence of rational decisions from competitors. d. trigger a sequence of rational decisions and responses from competitors. ANS: A 6. Economic games are set in a: a. positive economic environment. b. neutral economic environment. c. negative economic environment. d. none of these. ANS: C 7. In any strategic game: a. different strategies result in different payoffs. b. each player is aware of all prior moves. c. the allocation of positive payoffs is an equilibrium outcome. d. multiple equilibrium outcomes are stable. ANS: A 8. In a simultaneous-move game, players: a. do not depend upon the best rational response by other players. b. make their initial moves without knowledge of moves made by other players. c. do not depend upon a rational response by other players. d. anticipate the resulting sequence of moves made by competing players. ANS: B 9. Sequential games: a. incorporate the possibility of an irrational response. b. that end after a finite sequence of moves can be solved completely. c. involve players that move in succession. d. involve players that are fully aware of all prior moves. ANS: B 10. In the Prisoner's Dilemma game: a. complete solution is derived using the look ahead and extrapolate back principle. b. each player moves in succession. c. each player is aware of all prior moves. d. none of these. ANS: D 11. Nash equilibrium: a. occurs when each player pursues a dominant strategy. b. occurs when each player pursues a secure strategy. c. is precluded when players pursue randomized strategies. d. is not possible in simultaneous-move, one-shot games. ANS: A 12. Solving complex sequential games that involve millions of calculations: a. requires a finite sequence of moves....
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This note was uploaded on 03/08/2011 for the course ECONABA 635 taught by Professor Leiter during the Summer '10 term at Andrew Jackson.

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chp 14 test bank - CHAPTER 14GAME THEORY AND COMPETITIVE...

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