Question : 13.2  Nash Equilibrium 1) A Nash equilibrium occurs if ________. A) each : 1377510

13.2  Nash Equilibrium

1) A Nash equilibrium occurs if ________.

A) each player chooses strategies that are mutual best responses

B) each player chooses their dominant strategy

C) each player chooses only a pure strategy

D) each player chooses only a mixed strategy

2) Which of the following is true of Nash equilibrium?

A) A game can have only one Nash equilibrium.

B) No player can improve his payoff by changing his strategy once in Nash equilibrium.

C) A Nash equilibrium cannot occur if each player is aware of the strategies of other players.

D) A Nash equilibrium occurs if each player earns a zero payoff irrespective of the strategy he chooses.

3) In a game, a Nash equilibrium is reached only if the players:

A)  understand the game and the payoffs associated with each strategy.

B) follow a mixed strategy.

C) use backward induction method to develop their strategies.

D) have no best response for the choices made by other players.

The payoff matrix given below shows the payoffs to two firms in millions of US dollars for choosing two alternative strategies. The first number listed in each cell is the payoff to the row player and the second number listed is the payoff to the column player.

4) Refer to the scenario above. Which of the following is true in this case?

A) This game has multiple Nash equilibria.

B) This game does not have a Nash equilibrium.

C) The dominant strategy equilibrium of this game is also the Nash equilibrium.

D) The dominant strategy equilibrium of this game is not Pareto efficient.

5) Refer to the scenario above. Which of the following will happen in equilibrium?

A) Firm A will use Strategy X, and Firm B will use Strategy Y.

B) Firm A will use Strategy Y, and Firm B will use Strategy X.

C) Both the firms will use Strategy X.

D) Both the firms will use Strategy Y.

6) Refer to the scenario above. What is the payoff to Firm A in equilibrium?

A) $2.4 million

B) $2.6 million

C) $5.2 million

D) $3.0 million

7) Refer to the scenario above. What is the payoff to Firm B in equilibrium?

A) $2.6 million

B) $0

C) $4 million

D) $3 million

Two rival firms have to choose between two strategies to maximize their benefits. The two alternative strategies available are X and Y. The matrix below shows their respective payoffs for each strategy they choose. The first number listed in each cell is the payoff to the row player and the second number listed is the payoff to the column player.

8) Refer to the scenario above. Which of the following is true in this case?

A) Firm A’s dominant strategy is to choose Strategy X.

B) Firm B’s dominant strategy is to choose Strategy Y.

C) Firm A chooses Strategy X if Firm B chooses Strategy Y.

D) Firm A chooses Strategy Y if Firm B chooses Strategy Y.

9) Refer to the scenario above. This game ________.

A) has two Nash equilibria

B) has a unique Nash equilibrium

C) has a dominant strategy equilibrium

D) does not have a Nash equilibrium

10) Refer to the scenario above. What is the sum of the payoffs to the firms if both the firms choose Strategy X?

A) 6

B) 0

C) 1

D) -1