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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) Cooperative game.
B) Zero-sum game.
C) Evolutionary game.
D) Public goods game.
  • 2. Who are the authors of the book 'Theory of Games and Economic Behavior'?
A) John Von Neumann and Oskar Morgenstern.
B) Daniel Kahneman and Amos Tversky.
C) Kenneth Arrow and George Stigler.
D) John Nash and Roger Myerson.
  • 3. In cooperative games, what is the core?
A) A stable outcome without any external enforcement.
B) An allocation accepted by all players without negotiation.
C) The set of feasible allocations that cannot be improved upon by any coalition.
D) The basic strategy that guarantees a win.
  • 4. What does 'subgame perfect equilibrium' refer to?
A) An outcome determined by chance.
B) An equilibrium that exists only in finite games.
C) An equilibrium where players' strategies are optimal in every subgame.
D) A situation where players cannot change their strategies.
  • 5. Who introduced the concept of game theory in economics?
A) Adam Smith.
B) David Ricardo.
C) Milton Friedman.
D) John Von Neumann.
  • 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) 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.
  • 7. 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 randomly chosen.
D) A strategy that is better in some cases and worse in others.
  • 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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