Chapter 9 - Game Theory and Strategic Thinking

Question 1

Game

Answer 1

A situation involving at least two people that requires those involved to think strategically

Question 2

Game theory

Answer 2

The study of how people behave strategically under different circumstances

Question 3

Behaving strategically

Answer 3

Acting to achieve a goal by anticipating the interplay between your own and others’ decisions

Question 4

Prisoners’ dilemma

Answer 4

A game of strategy in which two people make rational choices that lead to a less-than-ideal result for both

Question 5

Dominant strategy

Answer 5

A strategy that is the best one for a player to follow no matter what strategy other players choose

Question 6

Nash equilibrium

Answer 6

An equilibrium reached when all player choose the best strategy they can, given the choices of all other players, it is a situation wherein, given the consequences, the player has no regrets about his or her decision

Question 7

Commitment strategy

Answer 7

An agreement to submit to a penalty in the future for defecting from a given strategy

Question 8

Repeated game

Answer 8

A game that is played more than once

Question 9

Tit-for-tat

Answer 9

A strategy in which a player in a repeated game takes the same action that his or her opponent did in the preceding round

Question 10

Backward induction

Answer 10

The process of analyzing a problem in reverse, starting with the last choice, then the second to last choice, etc. to determine the optimal strategy

Question 11

First-mover advantage

Answer 11

Benefit enjoyed by the player who chooses first and, as a result, gets a higher payoff than those who follow