Oligopoly and Game Theory — Practice Set

Oligopoly is characterized by:

A dominant strategy is one that:

A Nash equilibrium is a set of strategies where:

In the prisoners' dilemma, the Nash equilibrium is ___ and it is ___ for both players than cooperation.

For a cartel to raise prices successfully, members must overcome the incentive to:

The kinked demand curve model explains:

In a kinked-demand oligopoly, the MR curve has:

Repeated interaction (infinitely repeated games) can sustain cooperation through:

A payoff matrix shows:

OPEC's difficulty in maintaining high prices illustrates that cartels are undermined by: