Magnificent Game Theory Test - 60+ MCQs: Game Theory Quiz: Test Your Strategic Thinking with Thought-Provoking Questions and Answers

Total Questions : 50
Expected Time : 50 Minutes

1. What does 'Bounded Rationality' mean in the context of Game Theory?

A strategy based on limited cognitive abilities

A term referring to highly rational decision-making

A situation where players have unlimited information

A concept unrelated to decision-making

2. Explain the 'Chain Store Paradox' in Game Theory.

A paradox related to chain stores

A situation where chain stores always win in games

A paradox where the outcome is counterintuitive in sequential bargaining

A term unrelated to Game Theory

3. Who is often considered the father of Game Theory?

John Nash

Adam Smith

Karl Marx

Friedrich Hayek

4. Explain the concept of a dominant strategy and provide an example in a simple game.

It is a strategy that always results in the highest payoff, regardless of the opponent's choice.

It is a strategy that depends on the opponent's move for optimal results.

It is a strategy that involves random decision-making.

It is a strategy used in cooperative games for mutual benefit.

5. What is a zero-sum game in Game Theory?

A game with no winners or losers

A game where the total payoff remains constant, and gains by one player result in losses by another

A game involving zero players

A game with unlimited potential outcomes

6. What is the 'Principal-Agent Problem' in Game Theory?

A situation where the principal and agent work together seamlessly

A challenge in aligning the interests of a principal and agent

A game played between principals and agents

A term unrelated to Game Theory

7. What does 'Folk Theorem' propose in Game Theory?

A theorem passed down through generations

A concept unrelated to Game Theory

A set of theorems explaining repeated interactions and strategies in games

A theorem about folklore and stories

8. Define 'Subgame Perfect Nash Equilibrium' in Game Theory.

An equilibrium where players play optimally in every subgame of the overall game

A concept unrelated to Game Theory

A strategy involving subpar decision-making

An equilibrium specific to small subgames within a larger game

9. Explain the concept of 'Incomplete Contract' in Game Theory.

A contract missing essential elements

A contract that is never fulfilled

A contract with ambiguous terms

A situation where a contract cannot specify every possible contingency

10. What is 'Perturbed Equilibrium' in the context of Game Theory?

An equilibrium with small perturbations to test stability

A term unrelated to Game Theory

A strategy involving drastic changes to equilibrium

An equilibrium unaffected by perturbations

11. What is 'Collusion' in the context of Game Theory?

A strategy involving collaboration between players

A term unrelated to Game Theory

A situation where players collide physically

A game played in collusion with others

12. What is the 'Winner's Curse' in Auction Theory?

A situation where the winner is cursed with bad luck

A phenomenon where the winning bid exceeds the true value of the item

A curse that only affects auction winners

A term unrelated to auctions

13. Explain 'Renegotiation-Proof Equilibrium' in Game Theory and its application.

An equilibrium where renegotiation is impossible, ensuring stability

A term unrelated to Game Theory

A strategy that encourages frequent renegotiation

An equilibrium only applicable to specific games

14. What is the 'Stag Hunt' in Game Theory, and what does it illustrate?

A game involving hunting stags

A term unrelated to Game Theory

A metaphor for cooperation and conflict

A game where players only hunt rabbits

15. Explain the 'Folk Theorem' in Game Theory and its implications.

A set of theorems explaining repeated interactions and strategies in games

A term unrelated to Game Theory

A theorem about folklore and stories

A concept with no implications for strategic decision-making

16. What is the 'Hold-Up Problem' in Game Theory?

A situation where players hold up the game by refusing to play

A challenge in completing negotiations when one party has invested resources

A strategy involving holding up cards

A problem unrelated to strategic decision-making

17. Define 'Stacking' in the context of Game Theory.

A strategy involving stacking game pieces

A term unrelated to Game Theory

A concept related to forming alliances in games

A situation where players stack resources to gain an advantage

18. Define 'Evolutionary Game Theory' and its application in modeling evolving populations.

A theory focused on games played by evolving species

A term unrelated to Game Theory

A theory exclusive to non-evolving populations

A theory that ignores the concept of evolution

19. Define 'Coalitional Game' and provide an example.

A game played with coalitions of players forming alliances

A term unrelated to Game Theory

A game involving coal mining

A game where players compete without forming alliances

20. What is the Prisoner's Dilemma, and how does it illustrate key concepts in game theory?

It is a situation where cooperating leads to the best outcome for both players.

It highlights the tension between individual rationality and collective rationality.

It is a game with only one player making decisions.

It demonstrates the concept of zero-sum games.

21. What is the 'Chicken Game' in Game Theory?

A game involving actual chickens

A situation where players compete to see who can act more recklessly without yielding

A game played in a barnyard setting

A game with no defined rules

22. What is the 'Perfect Bayesian Equilibrium' and how does it differ from other equilibria?

An equilibrium involving perfect information and off-equilibrium beliefs

A term unrelated to Game Theory

An equilibrium specific to Bayesian games

A strategy that guarantees victory in all situations

23. Define 'Epistemic Game Theory' and its role in analyzing strategic interactions.

A theory focused on game strategies with epistemic elements

A term unrelated to Game Theory

A theory exclusive to non-strategic interactions

A theory that ignores the role of knowledge in games

24. Define the Nash equilibrium and explain its significance in game theory.

It is a solution where no player has an incentive to deviate unilaterally.

It is the optimal outcome in a cooperative game.

It represents a scenario with perfect information among players.

It is a strategy that guarantees victory in zero-sum games.

25. Define 'Bargaining Problem' in Game Theory.

A challenge in negotiating game rules

A problem unrelated to Game Theory

A situation where players bargain over the division of a surplus

A strategy to solve bargaining issues

26. In Game Theory, what is 'Sequential Equilibrium'?

An equilibrium where players take turns making decisions

A term unrelated to Game Theory

A strategy involving sequences of random events

An equilibrium involving sequential decision-making with perfect information

27. Explain the concept of 'Risk Aversion' in Game Theory.

A strategy focused on taking risks

A concept unrelated to strategic decision-making

A tendency to avoid risk when making decisions

A game where players compete in risky activities

28. Define 'Nash Equilibrium' and provide an example.

A state where one player dominates all others; Example: Monopoly

A balanced position where no player has an incentive to change their strategy; Example: Mutual cooperation in a prisoner's dilemma

A scenario where players act randomly; Example: Rolling a dice

A situation where players always choose the same strategy; Example: Tic Tac Toe

29. Explain the 'Siegel Paradox' in Game Theory and its implications.

A paradox involving a famous mathematician named Siegel

A term unrelated to Game Theory

A paradox where outcomes are counterintuitive in cooperative games

A paradox exclusive to non-strategic interactions

30. Examine the 'No-Regret Learning' strategy in repeated games.

A strategy where players regret their decisions

A term unrelated to Game Theory

A strategy that ensures players do not regret their past decisions on average

A strategy focused on always winning

31. Define 'Pure Strategy' and provide an example.

A strategy based on impure motives

A strategy involving mixed decisions

A strategy where players choose a single action with certainty; Example: Always playing 'Cooperate' in a repeated Prisoner's Dilemma

A strategy only applicable in certain situations

32. In Game Theory, what is 'Stackelberg Leadership'?

A leadership style found in corporate settings

A leadership model where one player makes decisions first, and others respond

A strategy that relies on followership

A concept unrelated to strategic decision-making

33. Define 'Harberger Triangle' in the context of taxation and public finance.

A triangle used in tax calculations

A term unrelated to Game Theory

A concept exclusive to private finance

A deadweight loss caused by a tax that exceeds the tax revenue collected

34. Define 'Markov Perfect Equilibrium' in dynamic games.

An equilibrium where players rely on Markov processes

A term unrelated to Game Theory

An equilibrium exclusive to static games

An equilibrium that ignores the concept of perfection

35. In Game Theory, what is 'Core'?

The central idea in a game

A term unrelated to Game Theory

A set of stable payoffs in a cooperative game

A strategy focused on the core of the game board

36. In Game Theory, what is a Nash Equilibrium?

A balanced position where no player has an incentive to change their strategy

A situation where one player dominates all others

A state of chaos with no defined strategies

A point of maximum uncertainty

37. Define 'Stochastic Games' and provide an example.

Games involving random elements and uncertain outcomes

A term unrelated to Game Theory

Games with predetermined outcomes

Games exclusively involving probability theory

38. What is 'Quantum Game Theory' and how does it differ from classical Game Theory?

A theory focused on games played in quantum environments

A term unrelated to Game Theory

A theory that ignores quantum principles

A theory exclusively for video games

39. In Game Theory, what does the term 'Pareto Efficiency' signify?

A situation where all players have equal resources

A state where one player has a significant advantage

A condition where no player can be made better off without making another worse off

A measure of randomness in decision-making

40. Explain the concept of 'Repeated Games' in Game Theory.

Games played in quick succession without breaks

Games with complex rules and strategies

Games where players interact over a series of rounds, influencing each other's decisions

Games played in isolation with no external factors

41. Examine the concept of 'Harsanyi Transformation' in Bayesian games.

A transformation that simplifies complex games

A term unrelated to Game Theory

A strategy involving mathematical transformations

A transformation exclusive to non-Bayesian games

42. What is the fundamental concept of Game Theory?

Perfect Competition

Strategic Decision-Making

Supply and Demand

Random Chance

43. Explain the 'Implementation Problem' in Mechanism Design Theory.

A challenge in implementing game strategies

A term unrelated to Game Theory

A problem exclusive to cooperative games

A challenge in designing mechanisms that induce players to truthfully reveal their private information

44. Define 'Core' in cooperative game theory and its significance.

A set of stable payoffs in a cooperative game

A term unrelated to Game Theory

A concept exclusive to non-cooperative games

A strategy involving the core of the game board

45. Explain 'Correlated Equilibrium' and its application in strategic interactions.

An equilibrium where players coordinate their strategies

A term unrelated to Game Theory

An equilibrium exclusive to non-cooperative games

A strategy focused on avoiding coordination

46. Define 'Poker Face' in the context of Game Theory.

A term used in card games unrelated to Game Theory

A strategy involving bluffing and maintaining a neutral expression

A situation where players trade poker cards

A game involving only facial expressions

47. What is the 'Winner's Delusion' in Game Theory?

A belief that winners are always delusional

A situation where the winner overestimates their skill or strategy

A term unrelated to Game Theory

A game played by winners

48. Examine the concept of 'Quantal Response Equilibrium' in Game Theory.

An equilibrium based on quantitative responses to opponents' strategies

A term unrelated to Game Theory

An equilibrium involving only qualitative responses

A strategy focused on quick responses

49. Define 'Perfect Bayesian Equilibrium' in Game Theory.

A state of perfect balance between players

A concept unrelated to Game Theory

A refinement of Nash Equilibrium considering off-equilibrium beliefs

A strategy involving perfect information

50. Examine the concept of 'Bayesian Nash Equilibrium' and its significance.

An equilibrium specific to Bayesian games

A term unrelated to Game Theory

An equilibrium exclusive to cooperative games

A strategy that ignores Bayesian principles

Game Theory MCQ Test 1