Question 1

Use the following to answer questions 10-11:
Table 12.5 
-(Table 12.5) Payoffs represent profits in millions of dollars. What is ESPN's dominant strategy?
A) none
B) run the Brett Favre cover story
C) run the Tim Tebow cover story
D) run either cover story

Accepted Answer

A

Question 2

A simultaneous game:
A) requires that both participants play exactly the same strategy at the same time.
B) involves at least one participant playing a random strategy after first observing the opponent's strategies.
C) necessitates participants revealing their strategy at the same time without knowing the strategy of their opponent.
D) requires both players to base their strategy on backward induction.

Accepted Answer

In a simultaneous game, both players must reveal their strategies at the same time without knowing the strategy of the other player. This is different from a sequential game where players take turns and can observe the previous player's move before making their own. Option A is incorrect because players are not required to play the same strategy. Option B describes a game with incomplete information where players do not have full knowledge of the other player's strategy, which is not the case in a simultaneous game. Option D is incorrect because backwards induction is a solution concept used in sequential games, where players reason backwards from the end of the game to make decisions.

Question 3

Use the following to answer questions 19-20:
Table 12.12 
-(Table 12.12) The payoffs are profits in millions of dollars. If Firm 1 follows a maximin strategy, the outcome of this game is:
A) (20 , 20).
B) (8 , 8).
C) (-20 , 15).
D) (-1 , 10).

Accepted Answer

D

Question 4

Which of the following statements is (are) TRUE? 
A) I and II
B) I, II, and III
C) I and III
D) III

Accepted Answer

Statement I is false because machine learning is one of the many subfields of artificial intelligence, not the other way around.

Statement II is false because machine learning algorithms can be used for a variety of tasks beyond image recognition, such as natural language processing, prediction, and decision-making.

Statement III is true because deep learning is a type of machine learning that involves training artificial neural networks with multiple layers of interconnected nodes.

Question 5

Use the following to answer question:
Table 12.4 
-(Table 12.4) Payoffs are profits in thousands of dollars. Which of the following statements is TRUE?
A) This game has no Nash equilibrium.
B) Horizon's dominant strategy is high price.
C) The Nash equilibrium occurs when both companies choose the low-price strategy.
D) There are two Nash equilibria, (80 , 80) and (65 , 65).

Accepted Answer

The Nash equilibrium occurs when both companies choose the low-price strategy because neither company can benefit by unilaterally changing their strategy from low price to high price, given the other company's choice.

Question 6

Use the following to answer question:
Table 12.6 
-(Table 12.6) Payoffs represent profits in thousands. What is the Nash equilibrium?
A) (20 , 20)
B) (17 , 17)
C) (14 , 14)
D) (19 , 10) or (10 , 19)

Accepted Answer

In a Nash equilibrium, each player's strategy is the best response to the other player's strategy. In this case, player 1's best response to player 2 choosing 17 is to also choose 17, since 17 yields a higher payoff for player 1 than any other choice when player 2 chooses 17. Similarly, player 2's best response to player 1 choosing 17 is also to choose 17. Therefore, (17, 17) is the Nash equilibrium.

Question 7

Use the following to answer question:
Table 12.3 
-(Table 12.3) The payoffs represent profits. If Cape North and Imperial both choose their dominated strategy, Cape North will earn a profit of _____ and Imperial will earn a profit of _____.
A) $154; $154
B) $120; $120
C) $75; $180
D) $75; $75

Accepted Answer

The answer of Use the following to answer question:
Table 12.3...

Question 8

Use the following to answer questions 13-14:
Table 12.7 
-(Table 12.7) Payoffs represent profits in millions of dollars. What is Owens Corning's dominated strategy?
A) no expansion
B) small expansion
C) large expansion
D) none

Accepted Answer

The answer of Use the following to answer questions 13-14:
Table...

Question 9

Use the following to answer questions 10-11:
Table 12.5 
-(Table 12.5) Payoffs represent profits in millions of dollars. In a Nash equilibrium, Sports Illustrated will run the _____ cover story and ESPN Magazine will run the _____ cover story.
A) Brett Favre; Brett Favre
B) Brett Favre; Tim Tebow
C) Tim Tebow; Brett Favre
D) Tim Tebow; Tim Tebow

Accepted Answer

In a Nash equilibrium, both Sports Illustrated and ESPN Magazine will choose the cover story that maximizes their profits, given the other's choice. Looking at the payoffs in the table, if Sports Illustrated chooses Brett Favre, then ESPN Magazine will choose Tim Tebow (since they have a higher payoff for Tim Tebow if Sports Illustrated chooses Brett Favre). And if Sports Illustrated chooses Tim Tebow, then ESPN Magazine will still choose Tim Tebow (since they have a higher payoff for Tim Tebow regardless of Sports Illustrated's choice). Therefore, the Nash equilibrium is for Sports Illustrated to run the Tim Tebow cover story and ESPN Magazine to run the Brett Favre cover story.

Question 10

Use the following to answer question:
Table 12.1 
-(Table 12.1) Randy and Todd are playing a simultaneous game. Randy's dominant strategy is _____. and Todd's dominant strategy is _____.
A) Bottom; Left
B) Top; Left
C) Bottom; Right
D) Top; Right

Accepted Answer

Randy's dominant strategy is Bottom because it gives him the highest payoff regardless of what Todd chooses. Todd's dominant strategy is Left because it gives him the highest payoff regardless of what Randy chooses.

Question 11

Use the following to answer questions 13-14:
Table 12.7 
-(Table 12.7) Payoffs represent profits in millions of dollars. The Nash equilibrium:
A) does not exist.
B) occurs when both firms choose small expansion.
C) occurs when both firms choose large expansion.
D) occurs when both firms choose no expansion.

Accepted Answer

In the Nash equilibrium, both firms would make the best decision based on the other firm's decision. If one firm chooses small expansion, the other firm would want to also choose small expansion to maximize profits. Therefore, the Nash equilibrium occurs when both firms choose small expansion, which results in the highest combined profits of $22 million.

Question 12

Use the following to answer questions 19-20:
Table 12.12 
-(Table 12.12) The payoffs are profits in millions of dollars. The Nash equilibrium of this game is:
A) (20 , 20).
B) (8 , 8).
C) (-20 , 15).
D) (-1 , 10).

Accepted Answer

The Nash equilibrium is the point where neither player can improve their payoff by changing their strategy, given the strategy of the other player. In this case, the Nash equilibrium is (20, 20) because neither player can improve their payoff by changing their strategy.

Question 13

Use the following to answer question:
Table 12.11 
-(Table 12.11) The payoffs represent dollars won or lost. Which of the following statements is TRUE?
A) The Nash equilibria are (1, -1) and (-1 , 1).
B) The dominant strategy for Player B is pick odd number.
C) In mixed strategy, the Nash equilibrium is for both players to randomly select their strategy with a 50% probability.
D) The pure-strategy equilibrium is (odd number, even number).

Accepted Answer

In a mixed strategy Nash equilibrium, both players randomize their strategies with equal probabilities when there is no dominant strategy, leading to a 50% probability for each strategy.

Question 14

Use the following to answer question:
Table 12.2 
-(Table 12.2) Thelma and Louise have been arrested for a crime. In this simultaneous game, the payoffs represent years in jail. Louise's dominated strategy is ______ while Thelma's dominated strategy is _________.
A) Confess; Deny
B) Deny; Deny
C) Deny; Confess
D) Confess; Confess

Accepted Answer

The answer of Use the following to answer question:
Table 12.2...

Question 15

Use the following to answer question:
Table 12.9 
-(Table 12.9) Payoffs represent profits in thousands of dollars. In this game, the Nash equilibria are:
A) (210 , 250) and (180 , 180).
B) (50 , 50) and (20 , 20).
C) (210 , 250) and (50, 50).
D) (20 , 20), (50, 50), and (180 , 180).

Accepted Answer

The Nash equilibria are (210 , 250) and (180 , 180). In a Nash equilibrium, neither player can improve their payoff by unilaterally changing their strategy. In this game, if Player 1 chooses "High" and Player 2 chooses "Low", Player 1's payoff is 210 and Player 2's payoff is 250. If Player 1 chooses "Low" and Player 2 chooses "High", Player 1's payoff is 180 and Player 2's payoff is 180. If either player deviates from these strategies, their payoff will decrease.

Question 16

The _____ model is an example of a simultaneous game, while the _____ model is an example of a sequential game.
A) Cournot; Stackelberg
B) Cournot; Bertrand
C) Bertrand; Cournot
D) Stackelberg; Bertrand

Accepted Answer

The Cournot model is an example of a simultaneous game where firms compete on the quantity of output they produce, while the Stackelberg model is an example of a sequential game where one firm acts as a leader and the other as a follower, determining output levels sequentially. The Bertrand model is a simultaneous game where firms compete on the price of their products.

Question 17

Use the following to answer question:
Table 12.8 
-(Table 12.8) Payoffs represent profits measured in thousands of dollars. Which of the following outcomes represent(s) a Nash equilibrium? 
A) II and I
B) II
C) II and III
D) III and IV

Accepted Answer

The answer of Use the following to answer question:
Table 12.8...

Question 18

Which of the following is (are) the elements of every game? 
A) I, II, III, and IV
B) I, II, and III
C) IV
D) I and II

Accepted Answer

The elements of a game include goals/objectives (I), rules (II), and challenges/obstacles (III). While feedback (IV) is often present in games, it is not a requirement for something to be considered a game. However, goals/objectives, rules, and challenges/obstacles are necessary for the activity to be considered a game. Therefore, option B, which includes I, II, and III, is the best choice.

Question 19

Use the following to answer question:
Table 12.10 
-(Table 12.10) The table shows the payoffs from the game rock-paper-scissors. Which of the following statements is (are) TRUE? 
A) II and III
B) I and III
C) III
D) I and II

Accepted Answer

The answer of Use the following to answer question:
Table 12.10...

Question 20

Suppose that Fizzy Soda and Townie Soda must choose whether to advertise their soft drinks. In a Nash equilibrium, both firms choose to advertise and earn weekly profits of $80,000. Which of the following statements is (are) TRUE? 
A) I
B) II and III
C) I, II, and III
D) I and II

Accepted Answer

The answer of Suppose that Fizzy Soda and Townie Soda...

Quiz 12: Game Theory

Use the following to answer questions 10-11: Table 12.5 -(Table 12.5) Payoffs represent profits in millions of dollars. What is ESPN's dominant strategy?

A simultaneous game:

Use the following to answer questions 19-20: Table 12.12 -(Table 12.12) The payoffs are profits in millions of dollars. If Firm 1 follows a maximin strategy, the outcome of this game is:

Which of the following statements is (are) TRUE?

Use the following to answer question: Table 12.4 -(Table 12.4) Payoffs are profits in thousands of dollars. Which of the following statements is TRUE?

Use the following to answer question: Table 12.6 -(Table 12.6) Payoffs represent profits in thousands. What is the Nash equilibrium?

Use the following to answer question: Table 12.3 -(Table 12.3) The payoffs represent profits. If Cape North and Imperial both choose their dominated strategy, Cape North will earn a profit of _ and Imperial will earn a profit of _.

Use the following to answer questions 13-14: Table 12.7 -(Table 12.7) Payoffs represent profits in millions of dollars. What is Owens Corning's dominated strategy?

Use the following to answer questions 10-11: Table 12.5 -(Table 12.5) Payoffs represent profits in millions of dollars. In a Nash equilibrium, Sports Illustrated will run the _ cover story and ESPN Magazine will run the _ cover story.

Use the following to answer question: Table 12.1 -(Table 12.1) Randy and Todd are playing a simultaneous game. Randy's dominant strategy is _. and Todd's dominant strategy is _.

Use the following to answer questions 13-14: Table 12.7 -(Table 12.7) Payoffs represent profits in millions of dollars. The Nash equilibrium:

Use the following to answer questions 19-20: Table 12.12 -(Table 12.12) The payoffs are profits in millions of dollars. The Nash equilibrium of this game is:

Use the following to answer question: Table 12.11 -(Table 12.11) The payoffs represent dollars won or lost. Which of the following statements is TRUE?

Use the following to answer question: Table 12.2 -(Table 12.2) Thelma and Louise have been arrested for a crime. In this simultaneous game, the payoffs represent years in jail. Louise's dominated strategy is while Thelma's dominated strategy is ___.

Use the following to answer question: Table 12.9 -(Table 12.9) Payoffs represent profits in thousands of dollars. In this game, the Nash equilibria are:

The _ model is an example of a simultaneous game, while the _ model is an example of a sequential game.

Use the following to answer question: Table 12.8 -(Table 12.8) Payoffs represent profits measured in thousands of dollars. Which of the following outcomes represent(s) a Nash equilibrium?

Which of the following is (are) the elements of every game?

Use the following to answer question: Table 12.10 -(Table 12.10) The table shows the payoffs from the game rock-paper-scissors. Which of the following statements is (are) TRUE?

Suppose that Fizzy Soda and Townie Soda must choose whether to advertise their soft drinks. In a Nash equilibrium, both firms choose to advertise and earn weekly profits of $80,000. Which of the following statements is (are) TRUE?