Ch. 15 strategic games

Question 1

Nash equillibrium

Answer 1

is a pair of strategies, one for each player, in which each strategy is a best response to the other.

Question 2

sequential-move games

Answer 2

in these games players take turns, and each player observes what his or her rival did before having to move.

we look ahead and reason back

Question 3

equilibrium path of the game

Answer 3

where each player is maximizing her payoff when taking the actions of subsequent players into account

Question 4

one way to win a sequential move game

Answer 4

you can make yourself better off by eliminating one of your options.

Question 5

simultaneous-move games

Answer 5

in these games players move at the same time. Neither player knows prior to moving what the other has done.

To analyze these games, we use the matrix or strategic form of a game.

Question 6

a pair of strategies is an equilibrium if ….

Answer 6

both players are playing their best responses.

Question 7

prisoners’ dilemma

Answer 7

a game in which conflict and cooperation are in tension; self-interest leads the players to outcomes that no one likes. It is in each player’s individual interest to not cooperate regardless of what the other does. Thus, both players end up not cooperating. Their joint interest would be better served, however, if they could find a way to cooperate.

Question 8

Which of the following is true of a prisoners’ dilemma?

a. It is easier to get out of a repeated prisoners' dilemma than a prisoners' dilemma played one time.	
b. The equilibrium represents the outcome that the players prefer.	
c. Price matching policies make a prisoners' dilemma worse.	
d. Price discrimination usually resolves a prisoners' dilemma

Answer 8

a. It is easier to get out of a repeated prisoners’ dilemma than a prisoners’ dilemma played one time.