1. Consider SCENARIO 1. Which player has a dominant strategy?

a. Tsunami

b. Cyclone

c. Both Tsunami and Cyclone

d. Neither Tsunami nor Cyclone

e. Cannot be determined on the basis of the information provided.

2. Consider SCENARIO 1. The Nash equilibrium strategy profile for this game is:

a. {Newspapers, Magazines}.

b. {Television, Magazines}.

c. {Newspapers, Radio}.

d. {Television, Radio}.

e. Cannot be determined on the basis of the information provided.

3. Consider SCENARIO 1. What is the strategy profile for this game if both players adopt a

secure strategy?

a. {Newspapers, Magazines}

b. {Television, Magazines}

c. {Newspapers, Radio}

d. {Television, Radio}

e. Cannot be determined on the basis of the information provided

4. Consider SCENARIO 1. Suppose that this game is infinitely repeated and the interest rate is

8 percent. The present value of the stream of future payoffs when the players do not

cooperate is:

a. $74.25 million.

b. $76.25 million.

c. $81 million.

d. $108 million.

e. None of the above.

5. Consider SCENARIO 1. Suppose that this game is infinitely repeated and the interest rate is

8 percent. The present value of the stream of future payoffs when the players cooperate is:

a. $74.25 million.

b. $76.25 million.

c. $81 million.

d. $108 million.

e. None of the above.

6. Consider SCENARIO 1. Suppose that this game is infinitely repeated and the interest rate is

8 percent. The present value of the stream of future payoffs when a player unilaterally

violates the agreement is:

a. $74.25 million.

b. $76.25 million.

c. $81 million.

d. $108 million.

e. None of the above.

7. Consider SCENARIO 1. Suppose that this game is infinitely repeated. At what interest rate

is a player indifferent between a coalition and defection?

a. 5 percent

b. 15 percent

c. 20 percent.

d. 25 percent

e. None of the above.