01:220:102 Study Guide - Final Guide: Nash Equilibrium, Game Theory, Strategic Dominance

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8 May 2019

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01:220:102 Full Course Notes

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As it relates to dominant strategy and nash equilibrium. The study of behavior in situations of interdependence; a way of predicting outcomes in strategic situations like oligopolies. A strategy that is a player"s best action regardless of the action taken by the other players. Depending on the payoff, a player may or may not have a dominant strategy. The result when each player in a game chooses the action that maximized his or her payoff given the action of the other player. Ignoring the effect of the other players. The outcome from which neither player wants to deviate.

Related Questions

4. Game theory terminology

Select the term that best describes each definition listed in the following table.

Definition	Nash Equilibrium	Dominant Strategy	Collusion	Tit-for-tat Strategy	Payoff Matrix	Prisoners' Dilemma
A player's best choice, if it exists, regardless of his or her opponent's strategy
A set of strategies (one for each player) in which each player's strategy is the best option for that player, given the chosen strategy of the player's opponents
A case in which individually rational behavior leads to a jointly inefficient outcome
A visual representation of a game showing all possible strategies for each player and all potential outcomes and payoffs

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1. Which of the following statements about oligopolies is not correct?

a.		Oligopolistic firms always charge the monopoly price.
b.		Oligopolistic firms are interdependent in a way that firms in perfect competition are not.
c.		An oligopolistic market has only a few sellers.
d.		The actions of any one seller can have a large impact on the profits of all other sellers.

2. Which is true of an oligopoly market that reaches a Nash equilibrium?

a.		The firms will not have behaved as profit maximizers.
b.		A firm will have chosen its best strategy, given the strategies chosen by other firms in the market.
c.		A firm will not take into account the strategies of competing firms.
d.		The market price will be different for each firm.

3. In game theory, what is a dominant strategy?

a.		the best strategy for a player to follow, regardless of the what strategies other players use
b.		a strategy that makes every player better off
c.		a strategy that must appear in every game
d.		the best strategy for a player to follow only if other players are cooperative

4. Which of the following situations produces the largest profits for oligopolists?

a.		The firms reach a Nash equilibrium.
b.		The firms combine to produce the monopoly output level.
c.		The firms set prices equal to marginal cost.
d.		The firms produce a quantity of output that lies between the competitive outcome and the monopoly outcome.

1. Which of the following statements about oligopolies is not correct?

a.		Oligopolistic firms always charge the monopoly price.
b.		Oligopolistic firms are interdependent in a way that firms in perfect competition are not.
c.		An oligopolistic market has only a few sellers.
d.		The actions of any one seller can have a large impact on the profits of all other sellers.

2. Which is true of an oligopoly market that reaches a Nash equilibrium?

a.		The firms will not have behaved as profit maximizers.
b.		A firm will have chosen its best strategy, given the strategies chosen by other firms in the market.
c.		A firm will not take into account the strategies of competing firms.
d.		The market price will be different for each firm.

3. In game theory, what is a dominant strategy?

a.		the best strategy for a player to follow, regardless of the what strategies other players use
b.		a strategy that makes every player better off
c.		a strategy that must appear in every game
d.		the best strategy for a player to follow only if other players are cooperative

4. Which of the following situations produces the largest profits for oligopolists?

a.		The firms reach a Nash equilibrium.
b.		The firms combine to produce the monopoly output level.
c.		The firms set prices equal to marginal cost.
d.		The firms produce a quantity of output that lies between the competitive outcome and the monopoly outcome.

01:220:102 Study Guide - Final Guide: Nash Equilibrium, Game Theory, Strategic Dominance

01:220:102 Full Course Notes

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