Question

- In a dominant strategy equilibrium a player uses a strategy that maximizes his utility no matter what strategies other players use. True or false?
- In a nash equilibrium a player uses the strategy that maximizes his utility no matter what strategies other players uses. True or false?
- Consider a game where there is a dominant strategy equilibrium. You would then argue that, in equilibrium

a-Each player gets the highest utility he can possibly get

b-Total surplus is not necessarily maximized

c-Total surplus is systematically maximized

Answer #1

Part i . This statement is true because
a **dominant strategy equilibrium** is
reached when each player chooses their own **dominant
strategy** that always provides greater utility to the
player, **no matter** what the **other**
player's **strategy** is

Part ii. This statement is false because **Nash
equilibrium** is a concept within **game
theory** where the optimal outcome of a
**game** is where there is no incentive to deviate
from their initial strategy. ... Overall, an individual can receive
no incremental benefit from changing actions, assuming other
players remain constant in their strategies.

Part III. I would argue in total surplus is systematically maximized because it is not measured systematically.

Which of the following is true for a Nash equilibrium of a
two-player game?
a) The joint payoffs of the two players are highest compared to
other strategy pairs.
b) It is a combination of strategies that are best responses to
each other.*?
c) Every two-player game has a unique Nash equilibrium.
d) None of the above is correct.

If only one player has a dominant strategy in a game with two
players, will there be a Nash equilibrium?

Which of the following conditions are necessary for the
existence of a Nash equilibrium in a two-player game?
None of the statements associated with this question are
correct
The existence of dominant strategies for both players
The existence of a dominant strategy for at least one
player
Ability to achieve the highest combined payoff for the two
players

1. Charging different prices for different units of a good is
called:
☐ a. Monopoly power.
☐ b. Index pricing.
☐ c. Price discrimination.
☐ d. Markup pricing.
☐ e. None of the above.
2. Which of the following statements is true:
☐ a. A Nash equilibrium is always a dominant strategy
equilibrium.
☐ b. If there exists a dominant strategy equilibrium then there
also exists a Nash equilibrium.
☐ c. There may be more than one dominant strategy
equilibrium....

A game has two players. Each player
has two possible strategies. One strategy is Cooperate, the other
is Defect. Each player writes on a piece of paper either a C
for cooperate or a D for defect. If both players write
C, they each get a payoff of $100. If both players
write D, they each get a payoff of 0. If one player
writes C and the other player writes D, the
cooperating player gets a payoff of S...

4. Consider the following non-cooperative, 2-player game. Each
player is a middle manager who wishes to get a promotion. To get
the promotion, each player has two possible strategies: earn it
through hard work (Work) or make the other person look bad through
unscrupulous means (Nasty). The payoff matrix describing this game
is shown below. The payoffs for each player are levels of
utility—larger numbers are preferred to smaller numbers. Player 1’s
payoffs are listed first in each box. Find...

When a Nash equilibrium is reached:
a.
the outcome will only change if the "lead" player changes his
strategy
b.
everyone is happy
c.it must be true that all players have a dominant strategy
d.no one has an incentive to break the equilibrium by changing
his strategy
Assume there are three hardware stores in the market for
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hammer. House Depot is an enormous mass producer of hammers and can...

Mike and Jake are basketball players who sometimes flop (that
is, intentionally fall or feign an injury in order to cause a foul
on another player). It is better for each of them if both play
fairly and don't flop then when both flop. But each player is
better off flopping than not flopping. Their payoffs are given
below.
Jake
Mike
Flop
Not Flop
Flop
(3, 3)
(4, 1)
Not Flop
(1, 4)
(1, 1)
For instance, if Mike flops...

1.
A Prisoners Dilemma illustrates the fact that
a.
Rational choices can lead to inefficient outcomes
b.
Rational choices always leads to good outcomes
c.
Rational choices always lead to inefficient outcomes
d.
None of the above
2.
Two roommates John and Joe are playing a simultaneous game of
cleaning the apartment. If neither of them clean, the apartment
gets filthy and both get a utility of 2. If John cleans and Joe
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Answer the following questions about oligopolistic markets for a
simultaneous game in which Microsoft and Apple decide whether to
advertise or not.
Players: Apple and Microsoft (MS)
Strategies: Advertise (A) or No-Ads (NA)
Payoffs:
If both choose to A, Apple gets $8 billion revenue and MS gets
$16 billion revenue;
If Apple choose A and MS choose NA, Apple gets $15 billion and
MS gets $12 billion;
If Apple choose NA and MS choose A, Apple gets $10 billion and...

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