Intermediate Game Theory and Decision Science Basics Quiz

Question 1
Which of the following best defines Nash Equilibrium in a strategic game?

(A) A scenario in which every player is forced to reach the same outcome

(B) A strategy set that appears optimal after repeated trial and error

(C) A situation where no player can benefit from unilaterally changing their strategy

(D) A scenario where all players cooperate for mutual benefit

Question 2
In decision science, what does the term 'dominated strategy' refer to?

(A) A strategy that may be optimal if opponents are unpredictable

(B) A strategy that provides nearly the same outcome as another, though slightly less effective

(C) A strategy that always results in a worse outcome than some other strategy, regardless of what opponents do

(D) A strategy that competitors tend to ignore because it is too aggressive

Question 3
What does the concept of 'mixed strategy' involve in game theory?

(A) Choosing a single, clearly superior strategy each time

(B) Selecting strategies based on a fixed routine with minor variations

(C) Randomizing over possible moves to keep opponents uncertain

(D) Combining strategies until one dominates over others

Question 4
Which statement best captures the idea of 'order effects' in decision-making?

(A) Decisions improve with more information being available at the beginning

(B) Choice outcomes remain stable regardless of presentation sequence

(C) The final option is always given the highest weight in a decision-making process

(D) The sequence in which options are presented influences the decision made

Question 5
How does the 'prisoner’s dilemma' illustrate a conflict between individual rationality and collective benefit?

(A) It highlights that individuals will choose cooperation when the risks are misleadingly low

(B) It demonstrates that optimal individual strategies always lead to the best collective outcome

(C) It shows that rational individuals might not cooperate even when it leads to a better collective outcome

(D) It implies that mutual cooperation is always the stable outcome in strategic interaction

Question 6
What is meant by 'strategic dominance' in decision theory?

(A) A tactic that nearly mirrors the opponent's choices

(B) A strategy that works best only when all players collude

(C) An approach that is slightly inferior but often used for risk minimization

(D) A strategy that yields a better outcome regardless of what others choose

Question 7
In the context of game theory, what does 'common knowledge' imply?

(A) Insights that are assumed to be true by most players but not proven

(B) A fact that all participants are aware of, and everyone knows that everyone else is also aware

(C) Information that is widely known but not necessarily shared among all players

(D) Data that only the majority of players understand completely

Question 8
Which description best captures the essence of 'risk dominance' in games?

(A) A nearly optimal strategy that can be outperformed if conditions are favorable

(B) A choice that is only viable when opponents also exhibit high risk

(C) A strategy that is preferred under uncertainty because it minimizes potential losses

(D) A strategy that always leads to the highest possible payoff

Question 9
How can game theory assist in real-world competitive situations?

(A) By focusing solely on maximizing individual profits without regard for opponents’ strategies

(B) By analyzing strategic interactions and predicting potential outcomes based on players’ choices

(C) By simplifying complex relationships into single-stage decisions without considering future moves

(D) By ensuring all players have access to the same information

Question 10
What is a key limitation in applying game theory models to real-life decision-making?

(A) The reliance on numerical equations that are always infeasible in actual scenarios

(B) The assumption of perfectly rational behavior, which may not hold true in reality

(C) A focus on moral rather than strategic reasoning in competitive contexts

(D) An overemphasis on long-term relationships rather than immediate outcomes

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