Question

Identify the definition for each term listed below from the following list.

    1. The study of how people make decisions where attaining goals depends on interactions with others.

    2. A table that shows the payoffs each firm earns from every combination of firm strategies.

    3. An agreement among firms to charge the same price or otherwise not to compete.

    4. A strategy that is the best for a​ firm, no matter what strategies other firms use.

    5. A situation in which each firm chooses the best​ strategy, given the strategies chosen by other firms.

    6. A game outcome in which players seek to increase their mutual payoff.

    7. A situation where one firm announces a price​ change, which is matched by other firms in the industry.

    8. A game in which the firms choose their strategies at the same time.

    9. One firm’s gain must equal the other firm’s loss.

    10. A game in which the sum of the two firms’ outcomes is positive.

    11. The firms select their optimal strategies in a single time period without regard to possible interactions in subsequent time periods.

    12. A game that recurs more than once.

​Instructions: Enter a numeric response corresponding to a definition listed above using an​ integer.

a. Collusion:  .

b. Zero-sum game:  .

c. Game theory:  .

d. Positive-sum game:  .

e. Payoff matrix:  .

Answer 1

1. The study of how people make decisions where attaining goals depends on interactions with others: Game theory

2. A table that shows the payoffs each firm earns from every combination of firm strategies: Payoff matrix

3. An agreement among firms to charge the same price or otherwise not to compete: Collusion

4. A strategy that is the best for a firm, no matter what strategies other firms use: Dominant strategy

5. A situation in which each firm chooses the best strategy, given the strategies chosen by other firms: Nash equilibrium

6. A game outcome in which players seek to increase their mutual payoff: Collusion

7. A situation where one firm announces a price change, which is matched by other firms in the industry: Collusion

8. A game in which the firms choose their strategies at the same time: Collusion

9. One firm’s gain must equal the other firm’s loss: Zero sum game

10. A game in which the sum of the two firms’ outcomes is positive: Positive sum game

11. The firms select their optimal strategies in a single time period without regard to possible interactions in subsequent time periods: Collusion

12. A game that recurs more than once: NA