Economists Use Game Theory to Analyze Oligopolies Because

question 253

Multiple Choice

Economists use game theory to analyze oligopolies because

• A)real markets are too complicated to analyze without using games.
• B)it is more enjoyable for economists and students to learn by playing games.
• C)game theory helps us to understand why interactions among firms are crucial in determining profitable business strategies.
• D)game theory is useful in understanding the actions of firms that are price takers.

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Definitions:

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The phenomenon where individuals punish wrongdoers at a personal cost to themselves without direct benefit, to enforce societal norms or cooperative behavior.

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A group creativity technique designed to generate a large number of ideas for the solution of a problem.