1.Under the non -strategic view of bargaining, the terms of agreeme nt are determined by a. Your opponent’s eagerness to reach agreement b. Your outside options c. Your ...

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1.Under the non -strategic view of bargaining, the terms of agreeme nt are determined by
a.
Your opponent’s eagerness to reach agreement


b.
Your outside options


c.
Your opponents gain from agreement


d.
All of the above


2. Use the following case from questions 39 -44
A shoplifter and a security guard are playing a simultaneous game. If the shoplifter steals and the security
guard is vigilant, the shoplifter gets caught she suffers a loss of 20, and the security guard gets a bonus
worth 15. If the shoplifter steals and the security guard is not vigilant, she does not get caught and gains
15 and the guard loses 5. If the shoplifter does not steal and the guard is vigilant, the guard loses 3 for the
effort, while the shoplifter gains nothing and if the shoplifter does not steal and the guard is not vigilant,
neither gain anything

If the security guard knows that the shoplifter has been caught before, his best response would be
a.
Being watchful


b.
Sleeping on the job


c.
Run


d.
Hide

3. Use questions 16 - 27 use the following setup
Consider a sequential game between a shopkeeper and a haggling customer. The party who moves fir st
chooses either a high price ($50) or low price ($20) and the second mover either agrees to the price or
walks away from the deal and neither party gets anything. Ignore costs and assume the customer values
the item at $60.

Looking ahead to how the shopkeeper is more likely to respond what price should the customer more
likely to quote?
a.
High price

b.
Low price


c.
Let the shopkeeper quote the price


d.
A compromised price between the high and the low
4. Use the following case from questions 25 -31
Two siblings, Bratty Brenda and Tattling Tina are playing a simultaneous hit and tell game. Bratty Brenda
can hit Tattling Tina or not and Tattling Tina can tattle on Bratty Brenda or not. Relative to no hitting and
no tattling, if Bratty Brenda hits Tattl ing Tina, and she tattles they both experience a loss of 10. Not
telling, gets Tattling Tina a bruise, a loss of 5 but Bratty Brenda gains 5. If she tattles untruthfully,
Tattling Tina gets a gain of 5 and Bratty Brenda loses 5. If they get along, no one g ets anything

If Tattling Tina does not tattle, what would Bratty Brenda’s best response be
a.
Hit


b.
Not hit


c.
Run


d.
Hide
5. Use the following to answer questions 81 -84
Consider the following information for a simultaneous move game: Two discount stores (megastore and
superstore) are interested in expanding their market share through advertising. The table below depicts the
strategic outcomes (profits) of both stores with and without advertising.


Superstore
Advertise Don’t Advertise
Megastore Advertise $95 , $80 $305 , $55
Don’t Advertise $65 , $28