If the Maximin and Minimax Values Are Not Equal in a Two-Person

question 12

Multiple Choice

If the maximin and minimax values are not equal in a two-person zero-sum game,

• A)a mixed strategy is optimal.
• B)a pure strategy is optimal.
• C)a dominated strategy is optimal.
• D)one player should use a pure strategy and the other should use a mixed strategy.

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Definitions:

Moral Hazard

The risk that one party to a transaction might change their behavior to the detriment of the other party after the transaction has taken place, particularly when the first party is protected from the consequences.

Adverse Selection

A situation where asymmetric information results in high-risk individuals buying insurance or goods more frequently than low-risk individuals, distorting the market.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good producers are willing to supply.

Medical Care

The maintenance or improvement of health via the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in people.