practice Q week 5 Flashcards
In Game Theory, what do we call an outcome which no player can improve individually by changing their decision?
Nash equilibrium
General equilibrium
Pareto optimum
Nash equilibrium
In Agency Theory, what do we call the person hiring an agent to do something on their behalf?
Master
Principal
President
Principal
Which of the following statements about game theory is not true?
Game theory is about explaining choices.
Game theory is about choices of individuals.
Game theory is about parametric rationality.
Game theory is about parametric rationality.
Which of the following assumptions is NOT an assumption of rational choice theory?
That agents have preferences that are logically derived.
That agents can rationally process all available information.
That agents have all information about all options to choose fro
That agents have preferences that are logically derived.
Which of the answers below best describes the difference between parametric and strategic rationality?
The difference between rational decision-making when all decision parameters are given versus when decision parameters are dependent on the decisions of others.
The difference between using explaining and understanding as a research base.
The difference between focusing on individualism or holism.
The difference between rational decision-making when all decision parameters are given versus when decision parameters are dependent on the decisions of others.
Which of the following phenomena is best explained by the ‘chicken game’ in game theory?
The confrontation between Soviet Union and the U.S. during the cold war.
A traffic convention
A contingency fee
The confrontation between Soviet Union and the U.S. during the cold war.
The epistemological issue of how we should research reality has two dimensions: explaining and understanding; what is the difference between the two?
Explaining is about discovering generalizable laws whereas understanding does not aim at generalizing.
Explaining is about interpretation of actions whereas understanding is about causes of actions.
Explaining is a form of appreciation of knowledge whereas understanding clarifies the context of the knowledge.
Explaining is about discovering generalizable laws whereas understanding does not aim at generalizing.
What is the aim of Rational Choice Theory?
Explain behavior and social phenomena from the collective choices made by societies
Explain behavior and social phenomena from the rational choices of individuals
Understand behavior and social phenomena from the self-interested choices of individuals
Explain behavior and social phenomena from the rational choices of individuals
The assumption of strategic rationality in game theory involves the view that….
Rational agents make their own choices regardless of what others do.
Rational agents consider the choices of others in making rational choices.
Rational agents make no choices unless others also choose.
Rational agents consider the choices of others in making rational choices.
The application of agency theory and corporate governance is mostly concerned with…
The fact that managers are often not the most capable people.
The mistake that managers make during their term in office.
The separation of ownership and control in listed firms.
The separation of ownership and control in listed firms.
