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

1. 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

2. 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

3. 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

4. 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

5. 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

6. Explain the 'Centipede Game' in Game Theory.

A game played with centipedes

A sequential game where players take turns deciding to continue the game or end it for a payoff

A game involving centipede-shaped boards

A game with 100 possible outcomes

7. 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

8. 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

9. What is 'Tit-for-Tat' strategy in Game Theory?

A strategy based on random choices

A strategy of reciprocal cooperation, mirroring the opponent's last move

A strategy that always defects regardless of the opponent's move

A strategy involving elaborate plans and deception

10. What is 'Risk Parity' in the context of Risk-Averse Players?

A strategy focused on taking excessive risks

A term unrelated to Game Theory

A strategy that ignores risk considerations

A strategy aiming to distribute risks equally among players

11. 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

12. 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

13. Examine the 'Quantal Response Equilibrium' strategy and its application in behavioral game theory.

An equilibrium based on quantitative responses to opponents' strategies

A term unrelated to Game Theory

An equilibrium exclusive to cooperative games

A strategy that ignores behavioral aspects

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. What is 'Markov Chain Game' and how does it differ from traditional games?

A game with outcomes determined by Markov chains

A term unrelated to Game Theory

A game exclusively played in chains

A game that ignores the concept of Markov chains

21. 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

22. What is the fundamental concept of Game Theory?

Perfect Competition

Strategic Decision-Making

Supply and Demand

Random Chance

23. 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

24. 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

25. 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

26. 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

27. 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

28. 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

29. 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

30. What role does 'Algorithmic Game Theory' play in modern strategic decision-making?

The use of algorithms to make strategic decisions

A term unrelated to Game Theory

A strategy that follows specific algorithms in games

The intersection of game theory and computer science to analyze and design algorithms for strategic scenarios

31. 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

32. 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

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

John Nash

Adam Smith

Karl Marx

Friedrich Hayek

34. 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

35. 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

36. 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

37. 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.

38. 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.

39. 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

40. 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

Game Theory MCQ Test 2