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