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Theory of Games and Economic Behavior by John Von Neumann - Exam
  • 1. Which of the following is a type of game that has a clear conflict of interest?
A) Public goods game.
B) Zero-sum game.
C) Cooperative game.
D) Evolutionary game.
  • 2. Who are the authors of the book 'Theory of Games and Economic Behavior'?
A) John Nash and Roger Myerson.
B) Kenneth Arrow and George Stigler.
C) Daniel Kahneman and Amos Tversky.
D) John Von Neumann and Oskar Morgenstern.
  • 3. In cooperative games, what is the core?
A) The basic strategy that guarantees a win.
B) The set of feasible allocations that cannot be improved upon by any coalition.
C) An allocation accepted by all players without negotiation.
D) A stable outcome without any external enforcement.
  • 4. What does ‘best response’ mean in game theory?
A) The strategy that yields the highest payoff given the other players' strategies.
B) Any strategy that players prefer.
C) The strategy that ensures a win every time.
D) The most conservative choice.
  • 5. What is a 'Pareto efficient' outcome?
A) An allocation where no player can be made better off without making another player worse off.
B) An optimal outcome only for one player.
C) An outcome where players always get equal benefits.
D) A game that always ends in a tie.
  • 6. Who introduced the concept of game theory in economics?
A) Adam Smith.
B) David Ricardo.
C) John Von Neumann.
D) Milton Friedman.
  • 7. What does 'subgame perfect equilibrium' refer to?
A) A situation where players cannot change their strategies.
B) An equilibrium where players' strategies are optimal in every subgame.
C) An outcome determined by chance.
D) An equilibrium that exists only in finite games.
  • 8. What is a strictly dominated strategy?
A) A strategy that is worse than another strategy for every possible action of the other players.
B) A strategy that is randomly chosen.
C) A strategy that cannot be improved upon.
D) A strategy that is better in some cases and worse in others.
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