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Unformatted text preview: CHAPTER 13 Game Theory and Competitive Strategy MULTIPLE CHOICE Section 13.1 easy 1. Which of the following conditions, if present, is sufficient to make a game cooperative? a. Individual payoffs are greater if all players choose the same strategy. b. Players can communicate with each other. c. Players can negotiate binding contracts committing them to particular strategies. d. Players must agree unanimously on any set of strategies. e. The payoff that is highest for all individuals together is also highest for each individual player. moderate 2. You are playing a game in which a dollar bill is auctioned. The highest bidder receives the dollar in return for the amount bid. However, the second-highest bidder must pay the amount that he or she bids, and gets nothing in return. The optimal strategy is: a. to bid the smallest allowable increment below $1. b. to bid nothing. c. to bid $0.99. d. to bid more than a dollar. easy 3. Which of the following are examples of cooperative games? a. the bargaining between a buyer and seller over the price of a car b. independent action by two firms in a market regarding advertising strategies c. independent pricing strategies by two firms in a market d. independent pricing strategies by many firms in a market e. team games (such as baseball or basketball). easy 4. In the spring of 1994, Northwest Airlines took the independent action of reducing fares on its flights. Other competing airlines quickly matched the fare cuts. These actions might be interpreted as: a. a noncooperative game. b. a cooperative game. c. a constant sum game. d. a competitive game. Scenario 1: You are negotiating with your florist over the price of flowers for your wedding. You value the floral arrangements at $500. It cost your florist $200 to do the arrangements. You finally settled on a price of $250. moderate 5. Refer to Scenario 1. Your negotiations are an example of: a. a noncooperative game. b. a cooperative game. c. a constant sum game. d. a competitive game. e. both (b) and (c) 207 CHAPTER 13 TEST BANK GAME THEORY AND COMPETITIVE STRATEGY SIXTH EDITION moderate 6. Refer to Scenario 1. At your negotiated price your consumer surplus is: a. $0 a. $50 b. $200 c. $250 d. $300 moderate 7. Refer to Scenario 1. At your negotiated price the producer surplus is: a. $0 b. $50 c. $200 d. $250 e. $300 moderate 8. Refer to Scenario 1. If your negotiated price had been $350 instead of $250, the sum of consumer surplus and producer surplus would be: a. less than what would have accrued at the $250 price. b. the same as what would have accrued at the $250 price. c. more than what would have accrued at the $250 price. d. None of the above is necessarily correct....
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- Spring '11
- Game Theory, Dominant strategy