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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) John Von Neumann and Oskar Morgenstern.
C) Daniel Kahneman and Amos Tversky.
D) John Nash and Roger Myerson.
  • 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 is a strictly dominated strategy?
A) A strategy that cannot be improved upon.
B) A strategy that is worse than another strategy for every possible action of the other players.
C) A strategy that is better in some cases and worse in others.
D) A strategy that is randomly chosen.
  • 5. What is a 'Pareto efficient' outcome?
A) An outcome where players always get equal benefits.
B) An optimal outcome only for one player.
C) An allocation where no player can be made better off without making another player worse off.
D) A game that always ends in a tie.
  • 6. Who introduced the concept of game theory in economics?
A) Milton Friedman.
B) Adam Smith.
C) David Ricardo.
D) John Von Neumann.
  • 7. What does ‘best response’ mean in game theory?
A) Any strategy that players prefer.
B) The strategy that ensures a win every time.
C) The strategy that yields the highest payoff given the other players' strategies.
D) The most conservative choice.
  • 8. What does 'subgame perfect equilibrium' refer to?
A) An outcome determined by chance.
B) A situation where players cannot change their strategies.
C) An equilibrium where players' strategies are optimal in every subgame.
D) An equilibrium that exists only in finite games.
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