TEST BANK FOR CHAPTER 5: Game Theory

MULTIPLE CHOICE 1. A football team has the chance of scoring the game-winning touchdown on the last play of the game. It can either run or pass. The defense can play for the run or play for the pass. The following normal form lists the payoffs from the game made up by this last play. The payoffs are probabilities of winning the game. Offense Defense Defend Pass Defend Run Pass 0, 1 1, 0 Run 1, 0 0, 1 What is the defense’s dominant strategy? a. Defend the run. b. Defend the pass. c. Defend both plays at random with equal probability. d. The defense does not have a dominant strategy. ANS: d 2. Consider the same football situation as in the previous question, but now suppose the probabilities of winning are less extreme than before, given by the following normal form: Offense Defense Defend Pass Defend Run Pass .2, .8 .8, .2 Run .8, .2 .2, .8 What is the defense’s dominant strategy? a. Defend the run. b. Defend the pass. c. Defend both play at random with equal probability. d. The defense does not have a dominant strategy. ANS: d 1 This study source was downloaded by from CourseH on :15:45 GMT -05:00 TEST BANK FOR CHAPTER 5 : GAME THEORY Chapter 5: Game Theory 3. Consider the same football situation as in the previous question, but now suppose the payoffs (probabilities of winning) are as given in the following normal form: Offense Defense Defend Pass Defend Run Pass .2, .8 .3, .7 Run .5, .5 .4, .6 Which team has a dominant strategy? a. Neither. b. Both. c. Only the offense. d. Only the defense. ANS: c 4. A football team has the chance of scoring the game-winning touchdown on the last play of the game. It can either run or pass. The defense can play for the run or play for the pass. The following normal form lists the payoffs from the game made up by this last play. The payoffs are probabilities of winning the game. Offense Defense Defend Pass Defend Run Pass 0, 1 1, 0 Run 1, 0 0, 1 The Nash equilibrium is (equilibria are) a. the offense runs and the defense plays for the run. b. the offense passes and the defense plays for the pass. c. the offense runs and the defense plays for the pass. d. both pick their choice at random with equal probability. ANS: d 2 This study source was downloaded by from CourseH on :15:45 GMT -05:00 Chapter 5: Game Theory 5. Consider the same football setting as in the previous question, but now suppose the payoffs (probabilities of winning) are given by the following normal form: Offense Defense Defend Pass Defend Run Pass .2, .8 .9, .1 Run .5, .5 .4, .6 The Nash equilibrium is (equilibria are) a. the offense runs and the defense plays for the run. b. both pick their choice at random with the offense focusing more on the run and the defense on defending the pass. c. both pick their choice at random with the offense focusing more on the pass and the defense on defending the run. d. both pick their choice at random with equal probability of either play. ANS: b 6. Teens A and B are smitten with each other but neither knows of the other’s feelings. Suppose the teachers at their school organize a dance. The “payoff” is based on whether their advances are rebuffed or accepted. If they both Declare, they get positive utility but if they are Rebuffed they face humiliation (significantly negative payoff). Rebuffing an advance slightly elevates the teen’s standing with peers. Teen A Tee