32. A repeated game is a game a. that is played exactly two times. b. that is pl

Question

32. A repeated game is a game
a. that is played exactly two times.
b. that is played more than once, but under different rules each time.

c. that is played more than once, under the same rules.

d. that is played differently each time.

33. In non-zero-sum games,
a. one player always wins and the other always loses
b. one player's winnings equal the other player's losses
c. both players may win, both may lose, or one may win and the other may lose
d. the players' combined outcomes can never equal zero

Use the following information to answer questions #34 and #35.

Two companies, Mega and Giga, are trying independently from each other to choose spending on research and development. They can choose either high spending or low spending.
If both companies choose low spending, they will both earn $10 million per year. If both companies choose high spending, they will both earn $5 million per year. If one chooses high and the other low, the company that chooses high spending will earn $20, while the company that chooses low will earn $2 million.

34. This game is best described as:
a. Cooperative, zero sum.
b. Cooperative, non-zero sum.
c. Non-cooperative, zero sum.
d. Non-cooperative, non-zero sum.

35. A dominant strategy for firm Mega would be:
a. Always choose a high level of R&D.
b. Always choose a low level of R&D.
c. Choose low if Giga chooses low and high if Mega chooses high.
d. There is no dominant strategy for Mega.

Explanation / Answer

C

D

A

B

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