Game Theory in Business

What is the optimal outcome for both players in the prisoner's dilemma?

• One confesses, the other remains silent

• Both deny the crime

• Both remain silent

• Both confess

Which field is NOT mentioned as an application area for game theory?

• Biology

• Astronomy

• Psychology

• Economics

Who is known for the concept of Nash equilibrium?

• John Nash

• Oscar Morgenstern

• Lloyd Shapley

• John Von Neumann

Which contributor to game theory was awarded the Nobel Memorial Prize in Economic Sciences in 2012?

• Lloyd Shapley

• Robert Aumann

• John Von Neumann

• Oscar Morgenstern

Which of the following is NOT a business application of game theory?

• Strategic alliances

• Product design

• Advertising

• Pricing strategies

What is the first step in analyzing a scenario using game theory?

• Define the actions and payoffs

• Model the game

• Analyze the strategies and outcomes

• Define the players

Which strategy involves cooperating on the first move and then matching the opponent's move?

• Grim trigger

• Nash equilibrium

• Dominant strategy

• Tit for Tat

What is a limitation of game theory?

• It assumes rational decision-making

• It is applicable only in economics

• It always predicts real-world outcomes

• It is easy to apply

Which strategy involves switching to defection if the other player defects?

• Dominant strategy

• Nash equilibrium

• Tit for Tat

• Grim trigger

What does randomization in game theory involve?

• Switching strategies based on opponent's behavior

• Always choosing the same strategy

• Choosing a strategy randomly according to a probability distribution

• Choosing a strategy based on opponent's past actions