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