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