Microeconomics Theory and Applications
Quiz 14: Game Theory and the Economics of Information
A Prisoner's Dilemma Equilibrium Is
A prisoner's dilemma equilibrium is: A)identical to the monopolistically competitive equilibrium. B)a Nash equilibrium. C)not a dominant-strategy equilibrium. D)the same as the perfectly competitive equilibrium.
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Which of the following is true of a prisoner's dilemma game? A)It does not have an equilibrium. B)It has a dominant-strategy equilibrium. C)It does not have a Nash equilibrium. D)It ensures better payoffs to the players compared to other games.
An effective and enforceable collusion in a duopoly will result in: A)a monopoly price and output in the market. B)a perfectly competitive outcome. C)an inefficient equilibrium. D)a large consumer surplus.
Which of the following is likely to occur if two firms in a duopoly market decide to collude and produce the same output and charge the same price? A)Each firm will receive twice the profit they earned before the agreement. B)Together the firms will produce less than the monopoly output. C)Each firm will receive exactly half of the monopoly profit. D)None of the firms will have an incentive to charge a lower price.
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