Filters
Question type
Study Flashcards

A coordination problem usually occurs in situations where there is:


A) no Nash equilibrium in a game.
B) a unique, but undesirable Nash equilibrium.
C) a unique, secure strategy for both players.
D) more than one Nash equilibrium.

E) None of the above
F) A) and C)

Correct Answer

verifed

verified

The figure below presents information for a one-shot game. The figure below presents information for a one-shot game. What are secure strategies for firm A and firm B respectively? A) (low price, high price) B) (high price, low price) C) (high price, high price) D) (low price, low price) What are secure strategies for firm A and firm B respectively?


A) (low price, high price)
B) (high price, low price)
C) (high price, high price)
D) (low price, low price)

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

The following depicts a normal-form game of price competition. The following depicts a normal-form game of price competition. Suppose that firm A deviates from a trigger strategy to support a high price. What is the present value of A's payoff from cheating? A) 5 B) 20 C) 25 D) 35 Suppose that firm A deviates from a trigger strategy to support a high price. What is the present value of A's payoff from cheating?


A) 5
B) 20
C) 25
D) 35

E) None of the above
F) A) and B)

Correct Answer

verifed

verified

Refer to the normal-form game of advertising shown below. Refer to the normal-form game of advertising shown below. Suppose there is a 20 percent chance that the advertising game depicted in Figure 10-17 will end next period. What is the present value to firm B of cheating on the collusive strategy {do not advertise, do not advertise}? A) $0 B) $10 C) $125 D) $175 Suppose there is a 20 percent chance that the advertising game depicted in Figure 10-17 will end next period. What is the present value to firm B of cheating on the collusive strategy {do not advertise, do not advertise}?


A) $0
B) $10
C) $125
D) $175

E) B) and D)
F) None of the above

Correct Answer

verifed

verified

OPEC was an effective cartel for many years, but recently it has been unable to maintain a high price for oil. What factors do you think are contributing to the demise of OPEC?

Correct Answer

verifed

verified

At least three factors account for the d...

View Answer

Suppose that you are a manager. You are considering whether or not to monitor employees with the payoffs in the normal-form game shown below. Suppose that you are a manager. You are considering whether or not to monitor employees with the payoffs in the normal-form game shown below. Management and a labor union are bargaining over how much of a $50 surplus to give to the union. The $50 is divisible up to one cent. The players have one shot to reach an agreement. Management has the ability to announce what it wants first, and then the labor union can accept or reject the offer. Both players get zero if the total amounts asked for exceed $50. If you were the labor union, which type of rules of play would you prefer to divide the $50 surplus? A) One-shot, simultaneous-move game B) One-shot, sequential-move game with management as the first mover C) One-shot, sequential-move game with labor union as the first mover D) One-shot, simultaneous-move game and one-shot, sequential-move game with management as the first mover Management and a labor union are bargaining over how much of a $50 surplus to give to the union. The $50 is divisible up to one cent. The players have one shot to reach an agreement. Management has the ability to announce what it wants first, and then the labor union can accept or reject the offer. Both players get zero if the total amounts asked for exceed $50. If you were the labor union, which type of "rules of play" would you prefer to divide the $50 surplus?


A) One-shot, simultaneous-move game
B) One-shot, sequential-move game with management as the first mover
C) One-shot, sequential-move game with labor union as the first mover
D) One-shot, simultaneous-move game and one-shot, sequential-move game with management as the first mover

E) C) and D)
F) B) and C)

Correct Answer

verifed

verified

Refer to the normal-form game of bargaining shown below. Refer to the normal-form game of bargaining shown below. Suppose that management and the union are bargaining over how much of a $500 surplus to give to the union. It is assumed that the surplus can only be split into $250 increments. Furthermore, negotiations are set up such that management and the union must simultaneously and independently write down the amount of surplus to allocate to the union. The payoff structure to this one-shot bargaining game is listed in Figure 10-16. Find the Nash equilibrium(ia) to this game. A) Union write down $0 and management write down $500. B) Union write down $250 and management write down $250. C) Union write down $500 and management write down $0. D) All of the statements associated with this question constitute Nash equilibria. Suppose that management and the union are bargaining over how much of a $500 surplus to give to the union. It is assumed that the surplus can only be split into $250 increments. Furthermore, negotiations are set up such that management and the union must simultaneously and independently write down the amount of surplus to allocate to the union. The payoff structure to this one-shot bargaining game is listed in Figure 10-16. Find the Nash equilibrium(ia) to this game.


A) Union write down $0 and management write down $500.
B) Union write down $250 and management write down $250.
C) Union write down $500 and management write down $0.
D) All of the statements associated with this question constitute Nash equilibria.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Firms will try to signal superior quality of their goods by:


A) making sales information available to the public.
B) advertising.
C) issuing warranties or guarantees.
D) making sales information available to the public and advertising.

E) A) and D)
F) B) and C)

Correct Answer

verifed

verified

Refer to the following game. Refer to the following game. If this one-shot game is repeated three times, the Nash equilibrium payoffs for firms A and B will be ______ each period. A) (10, 9) B) (11, 11) C) (-10, 7) D) (15, 8) If this one-shot game is repeated three times, the Nash equilibrium payoffs for firms A and B will be ______ each period.


A) (10, 9)
B) (11, 11)
C) (-10, 7)
D) (15, 8)

E) A) and B)
F) B) and D)

Correct Answer

verifed

verified

You are considering entering a market serviced by a monopolist. You currently earn $0 economic profits, while the monopolist earns $5. If you enter the market and the monopolist engages in a price war, you will lose $5 and the monopolist will earn $1. If the monopolist doesn't engage in a price war, you will each earn profits of $2. a. Write out the extensive form of the above game. b. There are two Nash equilibria for the game. What are they? c. Is there a subgame perfect equilibrium? Explain. d. If you were the potential entrant, would you enter? Explain why or why not.

Correct Answer

verifed

verified

a. The extensive form is presented in th...

View Answer

Would collusion be more likely in the shoe industry or in the airline industry? Why?

Correct Answer

verifed

verified

The airline industry seems to be more li...

View Answer

Refer to the payoff matrix below. Refer to the payoff matrix below. The dominant strategy of Player 1 is: A) S1. B) S2. C) S1 and S2. D) A dominant strategy does not exist. The dominant strategy of Player 1 is:


A) S1.
B) S2.
C) S1 and S2.
D) A dominant strategy does not exist.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

The dominant strategy of player 1 in the following game is: The dominant strategy of player 1 in the following game is: A) S1. B) S2. C) S1 and S2. D) A dominant strategy does not exist.


A) S1.
B) S2.
C) S1 and S2.
D) A dominant strategy does not exist.

E) A) and D)
F) All of the above

Correct Answer

verifed

verified

In the game shown below, firms 1 and 2 must independently decide whether to charge high or low prices. In the game shown below, firms 1 and 2 must independently decide whether to charge high or low prices. Which of the following are Nash equilibrium payoffs in the one-shot game? A) (0, 0) B) (5, -5) C) (-5, 5) D) (10, 10) Which of the following are Nash equilibrium payoffs in the one-shot game?


A) (0, 0)
B) (5, -5)
C) (-5, 5)
D) (10, 10)

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Consider the following innovation game: Firm A must decide whether or not to introduce a new product. Firm B must decide whether or not to clone firm A's product. If firm A introduces and B clones, then firm A earns $1 and B earns $10. If A introduces and B does not clone, then A earns $10 and B earns $2. If firm A does not introduce, both firms earn profits of 0. How many Nash equilibria are there for this game?


A) 0
B) 1
C) 2
D) 0, but there are secure strategies.

E) C) and D)
F) A) and D)

Correct Answer

verifed

verified

Which of the following are important determinants of collusion in pricing games?


A) The number of firms
B) Firm size
C) History
D) All of the statements associated with this question are correct.

E) A) and D)
F) All of the above

Correct Answer

verifed

verified

Which of the following conditions are necessary for the existence of a Nash equilibrium?


A) The existence of dominant strategies for both players.
B) The existence of a dominant strategy for one player and the existence of a secure strategy for another player.
C) The existence of a secure strategy for both players.
D) None of the answers is correct.

E) All of the above
F) A) and B)

Correct Answer

verifed

verified

Refer to the normal-form game of price competition shown below. Refer to the normal-form game of price competition shown below. Which of the following represents the set of possible pure strategy Nash equilibria? A) {A, C} B) {A, B} C) {(A, C) , (A, D) , (B, C) , (B, D) } D) {C, D} Which of the following represents the set of possible pure strategy Nash equilibria?


A) {A, C}
B) {A, B}
C) {(A, C) , (A, D) , (B, C) , (B, D) }
D) {C, D}

E) C) and D)
F) A) and C)

Correct Answer

verifed

verified

The dominant strategy for player 1 in the following game is: The dominant strategy for player 1 in the following game is: A) S1. B) S2. C) S1 and S2. D) None of the answers is correct.


A) S1.
B) S2.
C) S1 and S2.
D) None of the answers is correct.

E) A) and B)
F) A) and D)

Correct Answer

verifed

verified

If you advertise and your rival advertises, you each will earn $4 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $1 million and the non-advertising firm will earn $5 million. If you and your rival plan to be in business for only one year, the Nash equilibrium is:


A) for each firm to advertise.
B) for neither firm to advertise.
C) for your firm to advertise and the other not to advertise.
D) None of the answers is correct.

E) C) and D)
F) B) and D)

Correct Answer

verifed

verified

Showing 41 - 60 of 140

Related Exams

Exam 1

The Fundamentals of Managerial Economics

143 Questions

Exam 2

Market Forces: Demand and Supply

150 Questions

Exam 3

Quantitative Demand Analysis

170 Questions

Exam 4

The Theory of Individual Behavior

179 Questions

Exam 5

The Production Process and Costs

173 Questions

Exam 6

The Organization of the Firm

157 Questions

Exam 7

The Nature of Industry

123 Questions

Exam 8

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

130 Questions

Exam 9

Basic Oligopoly Models

134 Questions

Exam 11

Pricing Strategies for Firms With Market Power

140 Questions

Exam 12

The Economics of Information

128 Questions

Exam 13

Advanced Topics in Business Strategy

89 Questions

Exam 14

A Managers Guide to Government in the Marketplace

112 Questions

Show Answer