Suppose We Want to Use Game Theory to Analyse How

question 45

Multiple Choice

Suppose we want to use game theory to analyse how an oligopolist selects its optimal price.The cells of the payoff matrix show

• A)the profit that each producer can expect to earn by pursuing a single strategy.
• B)the profit that each producer can expect to earn from every combination of strategies by the firms in the market.
• C)the strategy that a firm must pursue to earn various levels of profit.
• D)the expected profits of rival firms.

---

Definitions:

Operant Conditioning

An approach to learning where behavioral potency is changed through the implementation of incentives or consequences.

Classical Conditioning

A learning process in which two stimuli are repeatedly paired; a response that is initially elicited by the second stimulus is eventually elicited by the first stimulus alone.

Contingency Management

A behavior modification technique that involves changing behavior by modifying the consequences, typically through rewards or punishments, that follow that behavior.

Substance Use Disorder

A medical condition characterized by an uncontrollable use of substances (like drugs or alcohol) despite harmful consequences to one’s health, social life, or both.