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What is market design?
a. Decorating physical marketplaces
b. Creating optimal rules and structures for markets
c. Designing logos for companies
d. None of the above
Which of the following is a key goal of market design?
a. Maximizing government control
b. Minimizing competition
c. Ensuring efficiency and fairness
d. Ignoring consumer preferences
In market design, what does the term "double auction" refer to?
a. An auction with two items for sale
b. An auction where bids and offers are matched simultaneously
c. An auction held twice a day
d. An auction with double the usual number of participants
What is the role of a central clearinghouse in market design?
a. Controlling prices in the market
b. Facilitating the exchange of goods and services
c. Encouraging monopolies
d. None of the above
Which economic concept is often associated with market design?
a. Perfect competition
b. Monopoly
c. Oligopoly
d. Socialism
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Related Questions
A coordination problem usually occurs in situations where there is:
a. a unique, but desirable Nash equilibrium
b. no Nash equilibrium
c. more than one Nash equilibrium
d. a unique, secure strategy for both players
Only typed answer and don't use chat gpt
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What is the Nash Equilibrium in a game? A. A situation where all players cooperate for maximum gain B. A situation where no player can improve their outcome by changing their strategy unilaterally C. A situation where players always choose the same strategy D. A situation where players randomly select strategies
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QUESTION 23 In the 1950s, Walt Disney began to plan the development of a theme park that would eventually become Disneyland. Disney hired an economist to help determine whether the park would be a financial success. This economist surveyed managers of existing amusement parks for advice. Many of these managers A. recommended that the theme park be located in California because population in the state would increase greatly in the future. Disney followed this advice. B. recommended that Disney first build an audience for his park by offering the ABC television network a weekly program that would feature Disney movies, cartoons and original programming. Walt Disney followed this advice. Both the television program and Disneyland were financial successes. C. recommended that Disney not build the park and leave the amusement park business to those who knew what they were doing. D. believed that a theme park would be very successful because the Disney name created a market among children…
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The study of how people make decisions in situations where attaining their goals depends on their interactions with others is called
A.
game theory.
B.
Nash equilibrium.
C.
the prisoners' dilemma.
D.
dominant strategy equilibrium.
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Give one example each to the following
statements. Explain your answer.
A. A Nash Equilibrium may not be Pareto
Efficient.
B. There exist mechanisms to induce
cooperation in the Prisoner's Dilemma game.
C. The pursuit of self-interest without regard for
others sometimes leads to outcomes that are
socially desirable.
arrow_forward
Which of the following gambles is “unfair”?
a.
A game that promises to pay you $1 if a coin comes up head and cost you $1 if a coin comes up tail, with no entry fee.
b.
A game that promises to pay you $10 if a coin comes up head and cost you $1 if a coin comes up tail, with no entry fee.
c.
A game that promises to pay you $10 if a coin comes up head and cost you $1 if a coin comes up tail, with an entry fee of $4.50 for the right to play.
d.
All of the above.
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Identify a real-world situation in which you see game theory/strategic behavior in action.
Explain the game: Who are the players ? What are the strategies they have at their disposal? How are payoffs determined? What, if any, is the Nash equilibrium?
Note, this article from Up Journey might help you come up with an example: https://upjourney.com/game-theory-examples-in-real-life
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“While auctions are appealing in theory, the challenges of auction design in practice are insurmountable” discuss
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Use the following information to answer questions 1 to 5.
A firm is deciding whether or not to enter a new market. The decision tree for the firm is provided below.
The prompt below the decision tree explains how the decision tree was created.
Enter
Do Not Enter
Allowed
0.9
Denied
0.1
3
Research
No Research
Good
0.7
Bad
0.3
5
6
Produce
Sell
Produce
Sell
Produce
Sell
8
9
10
High
0.75
Low
0.25
High
0.25
Low
0.75
High
0.6
Low
0.4
Profit (5000s)
1200
-800
-200
1200
-800
-200
1400
-600
0
-100
0
At node 1, the firm must decide whether to enter the new market or not. The cost of attempting to enter
is $100,000. The upper branch from node 2 shows that the firm has a 0.9 probability of being allowed to
enter the market. If the firm is allowed to enter, it will have to pay $1,500,000 to buy the facilities required
to become a part of the market. Node 3 shows that the firm will then consider doing a research study to
forecast demand for their new product prior to beginning production. The cost of…
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c. Compared to the Nash Equilibrium, when
sellers continually participate in the market
multiple choice 3
combined profits tend to be higher.
combined costs tend to be lower.
consumers benefit.
competition increases.
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QUESTION: What is the Nash equilibrium usineg the payoff matrix below?
Profit Payoff Matrix
Frontier High Price
Frontier Low Price
United High Price
United 50 Frontier 12
United 40 Frontier 15
United Low Price
United 30 Frontier 0
United 25 Frontier 10
A.
UNITED: HIGH
FRONTIER: HIGH
B.
UNITED: HIGH
FRONTIER: LOW
C.
UNITED: LOW
FRONTIER: HIGH
D.
UNITED: LOW
FRONTIER: LOW
E.
THERE IS NO NASH EQUILIBRIUM.
arrow_forward
Define the prisoner’s dilemma game. The prisoner’s dilemma game is a:
two-person noncooperative sequential game that demonstrates the difficulty of cooperative behavior in certain circumstances.
two-person cooperative simultaneous game that demonstrates the difficulty of cooperative behavior in certain circumstances.
two-person noncooperative simultaneous game that demonstrates the difficulty of cooperative behavior in certain circumstances.
two-person cooperative sequential game that demonstrates the difficulty of cooperative behavior in certain circumstances.
a. What assumptions lead to the dilemma?
If the prisoners confess, each would get a light sentence. But each prisoner is interrogated separately and is offered the chance to go free if he or she confesses to the crime and agrees to serve as a witness against the other prisoner. This creates the incentive for both prisoners to not confess.
If the prisoners do not confess, each would get a…
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The definition of Game Theory is: Game Theory is a field of mathematics that analyzes strategic-interaction between rational, self-interested players.
Give an example of a situation that can be considered a game from the perspective of game theory. You can choose this example from your experience or you can consider a hypothetical scenario. Use your own imagination and make
sure this is not any famous or known example used in game theory.
1. What is happening in this game?
2. Who are the players in this game?
3. What are the possible actions for each player?
4. Represent the game in normal form with the utilities you have mentioned in the description of the game.
5. Justify the utilities you have assigned.
6. Find the best responses of each player.
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29. What is another name for a simultaneous-move game of incomplete information?
a. Dynamic Game of Complete Information
b. Static Game of Complete Information
c. Dynamic Bayesian Game
d. Static Bayesian Game
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Say that you are bidding in a sealed-bid auction and that you really want the item being auctioned. Winning it would be worth $500 to you. Say you expect the next-highest bidder to bid $300.a. In a standard “highest-bid” auction, what bid would a rational person make?
The rational choice is to bid $500 since that is what the item is worth to you.
The rational choice is to bid a little bit more than $300 because that is the expected next-highest bid.
The rational choice is to bid just under $500 so that you have a higher chance of winning the auction and would still have a net benefit.
The rational choice is to bid over $500 to guarantee that you win the item.
b. In a Vickrey auction, what bid would he make?
The rational choice is to bid slightly more than $500.
The rational choice is to bid $500.
The rational choice is to bid slightly less than $500.
The rational choice is to bid slightly more than $300.
arrow_forward
QUESTION 2
Which of the following statements about a Nash equilibrium is not correct?
A.
For each finite noncoopertiave game there always exists a pure strategy Nash equilibrium.
B.
A game has at least two players.
C.
Each player plays a best response to opponents' Nash strategies.
D.
No player has a profitable unilateral deviation.
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In the prisoners' dilemma game, each player____________
www
OA. chooses the best outcome for himself
B. consults the other player to determine his best action
C. chooses the best outcome for both players together
OD. chooses the best outcome for the other player
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The above table shows the payoffs that either Darrin or Rob receive depending on whether they choose a high or a low price strategy. The predicted outcome is
A. Darrin - Low Price; Rob - Low Price.
B. Darrin - Low Price; Rob - High Price.
C. Darrin - High Price; Rob - Low Price.
D. Darrin - High Price; Rob - High Price.
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**Practice***
Amy and Bob are playing the following board game:(I) Amy starts. She has three possible actions: Pass, Attack, or Defend.(II) Bob observes what Amy chose, and then chooses between three actions with the same names: Pass, Attack, or Defend.(III) If either player passes, or one attacks and the other defends, then the game ends. But if either both players attack, or if both players defend, then Amy has to choose between two actions: Respond or Not Respond.
The payoffs are as follows:- If both players pass, both players get a payoff of 0.- If a player attacks and the other player defends, the player that attacks gets a payoff of 1, while the player that defended gets a payoff of 2.- If a player passes but the other player attacks or defends, the player who passes gets a payoff of -1, and the player who attacked or defended gets a payoff of 3.- If both players attack or both players defend:– If Amy responds, she gets a payoff of 4, and Bob gets a payoff of 0.– If Amy does…
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Think of an example of a decision problem or a game
theory problem. Submit the source of the story. You can
take it from a newspaper, from the Internet, magazine,
book. Simplify the problem and represent it using the
concepts of game theory or decision theory. Solve it.
Compare your results with the real-life results. In case
the results do not coincide, explain why. Which is the
element that the theory does not reflect. Real life source
is needed with a link to the source.
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1. One time your company needs cash and plans to auction off subsidiaries to the highest bidder. Mention the type of auction that will maximize your company's revenue from the sale if:a. Bidder is neutral on risk and has independent personal judgment?b. Bidder is risk-neutral and has an affiliated valuation estimate?
2. A manager will use a business strategy so that in the long run the company's profits will increase. The entry of competitors has an impact on the unfavorable profitability of the company. To deal with the entry of new competitors, a manager can consider the limit pricing strategy.a. Explain what is meant by limit pricing!b. How can the limit pricing strategy be effective?
3. It is known that the demand function of "I like" brand dry food companies in the monopolistic competition market is P = 100 - 2Q, while the cost function is TC = 5 + 2Q. in this case P = price level, Q = output level, and TC = total cost.a. Determine the combination of prices and production levels…
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Economics
Game theory: Consider a collective action game
with thirty individuals (N = 30). When the number
of participants in the joint project is n, each
individual, including shirkers, receives a benefit of
B(n) = 18n and each participant incurs a cost of
C(n) = 32 – 2n. Please answer the questions I am
asking!
1. Find all of the Nash equilibria, both stable and
unstable ones.
2. Find the socially optimal outcome.
3. Check if any of the Nash equilibria is socially
optimal. Explain your answer.
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Define the following terms with a suitable example:
a. Zero Sum game.
b. Saddle point of a game.
c. Game of perfect information.
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a) How many players does this game have? What are the strategies of each player?
(b) What are the Nash equilibria of this game?
(c) What are the Pareto Efficient outcomes?
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In your own words, and without using mathematical notation, provide an intuitive
explanation of each of the following terms.
a. A rationalizable strategy.
b. A strategy in an extensive form game of perfect information.
c. A Nash equilibrium in pure strategies.
20
S
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A strategy is called a pure strategy if it involves choosing ________.
a.
an action that yields a higher payoff to the opponent
b.
one particular action for a situation
c.
an action that yields a zero payoff to the player
d.
different combinations of actions for a situation
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Related Questions
- A coordination problem usually occurs in situations where there is: a. a unique, but desirable Nash equilibrium b. no Nash equilibrium c. more than one Nash equilibrium d. a unique, secure strategy for both players Only typed answer and don't use chat gptarrow_forwardWhat is the Nash Equilibrium in a game? A. A situation where all players cooperate for maximum gain B. A situation where no player can improve their outcome by changing their strategy unilaterally C. A situation where players always choose the same strategy D. A situation where players randomly select strategiesarrow_forwardQUESTION 23 In the 1950s, Walt Disney began to plan the development of a theme park that would eventually become Disneyland. Disney hired an economist to help determine whether the park would be a financial success. This economist surveyed managers of existing amusement parks for advice. Many of these managers A. recommended that the theme park be located in California because population in the state would increase greatly in the future. Disney followed this advice. B. recommended that Disney first build an audience for his park by offering the ABC television network a weekly program that would feature Disney movies, cartoons and original programming. Walt Disney followed this advice. Both the television program and Disneyland were financial successes. C. recommended that Disney not build the park and leave the amusement park business to those who knew what they were doing. D. believed that a theme park would be very successful because the Disney name created a market among children…arrow_forward
- The study of how people make decisions in situations where attaining their goals depends on their interactions with others is called A. game theory. B. Nash equilibrium. C. the prisoners' dilemma. D. dominant strategy equilibrium.arrow_forwardGive one example each to the following statements. Explain your answer. A. A Nash Equilibrium may not be Pareto Efficient. B. There exist mechanisms to induce cooperation in the Prisoner's Dilemma game. C. The pursuit of self-interest without regard for others sometimes leads to outcomes that are socially desirable.arrow_forwardWhich of the following gambles is “unfair”? a. A game that promises to pay you $1 if a coin comes up head and cost you $1 if a coin comes up tail, with no entry fee. b. A game that promises to pay you $10 if a coin comes up head and cost you $1 if a coin comes up tail, with no entry fee. c. A game that promises to pay you $10 if a coin comes up head and cost you $1 if a coin comes up tail, with an entry fee of $4.50 for the right to play. d. All of the above.arrow_forward
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Managerial Economics: A Problem Solving Approach
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ISBN:9781337106665
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