ECONOMICS
COMPETITION AND MARKET STRUCTURES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
predicting the results of bets placed on games like roulette.
|
|
|
the choice of an optimal strategy in conflict situations.
|
|
|
utility maximization by firms in perfectly competitive markets.
|
|
|
the way in which a player can win every game.
|
Detailed explanation-1: -Game theory is concerned with identifying optimal strategies in conflict situations. A table that gives the profits that will result from all possible combinations of a firm’s available strategies and its opponent’s available responses is called a payoff matrix.
Detailed explanation-2: -In other words, game theory is concerned with specifying actions for all players, ensuring that for each player, his/her chosen actions are optimal, given the actions of other players, implying that optimality is relative. As a result, it is generally difficult to define the best outcome from the view of all players.
Detailed explanation-3: -An optimal strategy is one that provides the best payoff for a player in a game. Optimal Strategy = A strategy that maximizes a player’s expected payoff. Games are of two types: cooperative and noncooperative games.