管理经济学第七版英文教辅chapter_9.pdf

1 Managerial Economics,7e(Keat)Chapter 11 Game Theory and Asymmetric Information Multiple-Choice Questions 1)Asymmetric information represents a market situation in which A)all parties to a transaction possess less than full information.B)one party in a transaction has more information than the other party.C)some information possessed by the parties in a transaction may be false.D)a zero-sum game exists.Answer:B Diff:2 2)In a zero-sum game A)the gains of one player are less than the gains of the other player.B)the gains of one player are greater than the gains of the other player.C)the gains of one player directly reflect the losses of another player.D)the gains and losses of players are all expressed in zeros.Answer:C Diff:2 3)The Prisoners Dilemma is an example of A)market signaling.B)a zero-sum game.C)a non-zero sum,non-cooperative game with a dominant strategy.D)adverse selection.Answer:C Diff:3 4)Moral hazard is the A)outcome of a Prisoners Dilemma.B)result of market signaling.C)risk associated with a Dutch auction.D)risk that one party to a contract may alter its post-contract behavior to the detriment of another party.Answer:D Diff:3 5)If banks face a problem in loan markets when bad credit risks are the ones most likely to seek bank loans,it is described as A)moral hazard.B)moral suasion.C)adverse selection.D)fraud.Answer:C Diff:2 2 6)John takes out a student loan at a bank but spends his money in Las Vegas to play at the casino.This situation is an example of A)moral hazard.B)moral suasion.C)adverse selection.D)fraud.Answer:A Diff:2 7)Market signaling A)is a way of conveying information to other parties in a transaction where asymmetric information exists.B)represents a dominant strategy in a multi-player game.C)results in an optimum solution to a beach kiosk scenario.D)None of the above Answer:A Diff:2 Analytical Questions 1)What is market signaling?Answer:A way of signaling information to other parties in situations where asymmetric information exists so that their ability to make correct decisions is improved.2)What is moral hazard?Answer:The risk involved to one party when another partys behavior changes in a detrimental manner after a contract has been entered into.Usually,this is the result of asymmetric information.3)What is asymmetric information?Answer:A market situation in which one party in a transaction possesses more complete information than another party.4)What is adverse selection?Answer:A situation in which the risk associated with the existence of asymmetric information causes one party not to enter into a contractual relationship with another party.5)What is game theory?Answer:A formal mathematical approach to examining the strategies used by individuals to make decisions when they know that their actions will affect the decisions of other individuals,and the other individuals take this into account in their decision making.It is particularly useful in analyzing business decision making in oligopolistic markets where firms are mutually interdependent.3 6)What is a payoff matrix?Answer:A tabular presentation of various outcomes to each player,in a two-player situation,based on the various simultaneous decisions made by the players.7)In game theory analysis,what is a dominant strategy?Answer:A strategy that would be the best one for a player in a non-cooperative game no matter what strategies are adopted by the other players in the game.8)The following matrix shows the payoffs for an advertising game between Coke and Pepsi.The firms can choose to advertise or to not advertise.Numbers in the matrix represent profits;the first number in each cell is the payoff to Coke.(Numbers in millions.)Coke(rows)/Pepsi(columns)Advertise Dont Advertise Advertise(10,10)(500,-50)Dont Advertise(-50,500)(100,100)a.Explain why this would be described as a Prisoners Dilemma game.b.Explain the probable outcome of this game.Answer:a.The joint profit-maximizing outcome is for neither to advertise.But there is a temptation to cheat,the dilemma,and thus the firms are likely to end up where they are collectively worst off.b.The dominant strategy for each firm is to advertise,and thus the probable outcome is that each will earn$10 million.