Chapter 8—When Other Firms React Key
1. Strategic behavior
2. The two types of games include
3. In a sequential game
4. In a sequential game
5. In a simultaneous game,
6. If a player has a strategy where one course of action outperforms all others no matter what other players do,
7. If a player has a strategy where one course of action under-performs all others no matter what other players
do, that strategy is
8. Often, when no player has a dominant strategy
9. If there is a combination of strategies in which each player’s action is the best response to the actions of other
players, then there is
10. The purpose of convention is
11. The components of a game include
12. A prisoner’s dilemma exists when
13. A prisoner’s dilemma is
14. The ways to escape a prisoner’s dilemma is to
15. A commitment
16. Forms of commitments include
17. When a game is played repeatedly
18. “Tit-for-tat” is
19. Given that the world is filled with uncertainty
20. When outcomes are uncertain
21. Strategic behavior is the result of an interdependent world.
22. In a simultaneous game, players look forward and think back.
23. Sequential games provide the opportunity to use real options.
24. Dominant strategies are often difficult to take because a better alternative could exist.
25. Firms look for dominated strategies in order to gain the upper hand on competitors.
26. In a Nash equilibrium no player wants to change his or her strategy.
27. As the number of players grows, the costs of game playing fall.
28. Game theory assumes rational behavior on the part of the players.
29. Companies cannot avoid prisoner dilemmas.
30. A commitment is a form of strategy.
31. Sunk costs can be commitments.
32. Repeated games often lead to cooperation.
33. Firms still have the incentive to cheat even after a game leads to cooperation.
34. “Tit-for-tat” prevents cheating.
35. When an outcome is weighted by a probability, it becomes an expected value.