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One-Time Games and the Prisoner's Dilemma quiz

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  • What is a one-time game in game theory?
    A one-time game is a strategic interaction that is played only once, with no opportunity for the players to interact again.
  • In the prisoner's dilemma, what is the dominant strategy for each player?
    The dominant strategy for each player is to confess, regardless of what the other player does.
  • What is a payoff matrix used for in game theory?
    A payoff matrix organizes the possible outcomes and payoffs for each player based on their choices and their opponent's choices.
  • What is a dominant strategy?
    A dominant strategy is the best choice for a player, no matter what the other player decides to do.
  • Does every game have a dominant strategy for both players?
    No, not every game has a dominant strategy for both players; sometimes only one or neither player has a dominant strategy.
  • What is the Nash equilibrium in the prisoner's dilemma?
    The Nash equilibrium is where both players confess, as each is making their best decision given the other's choice.
  • Is the Nash equilibrium always the best outcome for all players?
    No, the Nash equilibrium is not always the best outcome for all players; it is simply where all players are making their best decisions given the situation.
  • What is collusion in the context of oligopolies?
    Collusion is when firms agree to set prices or quantities together to maximize their joint profits, which is illegal in the United States.
  • What is a cartel?
    A cartel is a group of firms that collude to set prices and quantities, such as OPEC in the oil market.
  • Why is there an incentive to cheat in a cartel?
    There is an incentive to cheat because a firm can increase its individual profit by secretly breaking the agreement while others stick to it.
  • What is implicit collusion and how does price leadership relate to it?
    Implicit collusion occurs when firms indirectly coordinate prices without explicit agreements, often through price leadership where one firm sets a price and others follow.
  • Is price leadership illegal in the United States?
    No, price leadership is not illegal in the United States because it does not involve explicit agreements between firms.
  • What is the check and X method used for in game theory?
    The check and X method is used to identify dominant strategies and Nash equilibria in payoff matrices by marking the best choices for each player.
  • How do you identify a Nash equilibrium using the check and X method?
    A Nash equilibrium is found in any box of the payoff matrix that contains both a check and an X, indicating both players are making their best choices.
  • Can a player have a dominant strategy if the checks (or X's) are not in the same row (or column)?
    No, a player only has a dominant strategy if all their checks (or X's) are in the same row (or column), indicating one best choice regardless of the opponent's action.