Reference no: EM132290992

1. The joint payoffs to both players in a prisoners' dilemma would be higher if the players could collude.

True

False

2. Which of the following statements is true?

A. Players take actions that maximize their joint profits under a Nash equilibrium

B. One of the players must have a first-mover advantage in a two-player sequential game

C. Nash equilibria are only defined for repeated games

D. There may be no unique Nash equilibrium to a two-player simultaneous game.

BPO Services is in the business of digitizing information from forms that are filled out by hand. In 2006, a big client gave BPO a distribution of the forms that it digitized in house last year, and BPO estimated how much it would cost to digitize each form.

FORM TYPE                Mix of Forms             Form Cost

A                                 25%                             $0.25

B                                 25%                            $0.10

C                                 25%                             $0.15

D                                 25%                            $0.50

3. Please refer to above. If the client pays the cost for Form A for all forms processed, what is the average gain or loss earned across all forms processed?

A. Lose $0.10 per form

B. Break even

C. Gain $0.10 per form

D. Gain $0.15 per form