Every value in a payoff matrix represents: the gains and losses of decisions for each player regardless of the decisions of other players. the best possible outcomes of various players in a game. the gain or loss of a decision for each player given the decisions of other players. the worst possible outcomes of various players in a game.

Every value in a payoff matrix represents: the gains and losses of decisions for each player regardless of the decisions of other players. the best possible outcomes of various players in a game. the gain or loss of a decision for each player given the decisions of other players. the worst possible outcomes of various players in a game.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter15: Strategic Games

Section: Chapter Questions

Problem 2MC

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QUESTION 9 Consider the following sequential entry deterrance game. Player 1 plays first, and then Player 2 plays after observing the choice of Player 1. At the bottom of the decision tree, the first number represents the payoff of Player 1, while the second number represents the payoff of Player 2. Player 2 L (2,4) a Player 1 R (4,2) In this game, Player 2 has an incentive to threaten L, which would be credible. an incentive to threaten R, which wouldn't be credible. an incentive to threaten L, which wouldn't be credible. an incentive to threaten R, which would be credible. Player 2 (3,8)
A player's payoff can be made up of Only monetary value Only preferences Either monetary value or preferences Both monetary value and preferences ↓
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Game theory is a method of analyzing: the costs and benefits of a transaction. the situations in which there are interdependent outcomes. the factors that affect an individualos budget set. the relation between returns and productivity of factors.
What does a payoff matrix illustrate? A tit-for-tat strategy in repeated games. The possible outcomes of various strategies in game theory. The most efficient production level in noncooperative games. The optimal profit maximization strategy in Nash equilibrium.
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A buyer and seller trade with each other for an infinite number of periods. Both parties have a discount factor of d, where 0 < d < 1. In each period both parties can play trust (T) or to play selfish (S). If both the buyer and seller play T the payoffs are 4 to each player. If both parties plays the payoffs are 3 to each player. If one player plays S and the other T, the payoffs are 6 to the player who opted for 5 and 1 to the party that opted for T. Consider the following trigger strategy. In the first period play T. In any subsequent period, play T if in every previous period the outcome was (T, T), if not play S. What is the minimum d required for this trigger strategy to be subgame perfect equilibrium? O None of the other answers are correct. O 1/4 O 1/3 O 3/4
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In game theory, what does the term "payoff" refer to? a) The amount of money each player has at the beginning of the game. b) The final outcome of the game. c) The utility or benefit that a player receives based on the outcome of the game. d) The number of strategies available to each player.
Player 1 is an Internet service provider and Player 2 is a potential customer. They consider entering into a contract of service for a period of time. The provider decides between two levels of service: High or Low. The potential customer decides whether to Buy or Not Buy. When the potential customer calls customer service, the Internet service provider makes the initial offer.The potential customer then decides whether to Buy or Not Buy. Let’s say that the interaction ends after the potential customer makes their decision. Please set up the extensive form according to the following outcomes: i. If the Internet service provider offers Low and the potential customer doesn’t buy, they both make off with 1. ii. If the Internet service provider offers Low and the potential customer buys, the Internet service provider makes off with 3, and the customer receives 0. iii. If the Internet service provider offers High and the potential customer doesn’t buy, the Internet service provider makes…
Player 1 is an Internet service provider and Player 2 is a potential customer. They consider entering into a contract of service for a period of time. The provider decides between two levels of service: High or Low. The potential customer decides whether to Buy or Not Buy. When the potential customer calls customer service, the Internet service provider makes the initial offer. The potential customer then decides whether to Buy or Not Buy. Let’s say that the interaction ends after the potential customer makes their decision. 1. Please set up the extensive form according to the outcome if the Internet service provider offers High and the potential customer buys, the Internet service provider makes off with 2, and the customer receives 2. 2. Please solve for the SPNE. 3. Are there any non-credible threats? Why might this be, or why not?