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Repeated Games quiz

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  • What is a repeated game in game theory?
    A repeated game is a situation where the same game is played multiple times, allowing players to adjust their strategies based on previous outcomes.
  • How does a repeated game differ from a one-time game?
    In a repeated game, players interact over multiple rounds, whereas in a one-time game, they play only once.
  • Why are repeated games considered more realistic in real-life scenarios?
    Repeated games reflect ongoing decision-making situations, like businesses making output decisions repeatedly rather than just once.
  • How does interdependence affect players in repeated games?
    Interdependence encourages players to consider the long-term consequences of their actions, often leading to more cooperation or collusion.
  • What is the 'tit for tat' strategy in repeated games?
    'Tit for tat' means a player mirrors the opponent's previous action: cooperating if they cooperated, and cheating if they cheated.
  • How does the 'tit for tat' strategy promote cooperation?
    It rewards cooperation and punishes cheating, encouraging both players to keep cooperating to maximize their outcomes.
  • What is the 'trigger strategy' in repeated games?
    The 'trigger strategy' involves cooperating until the opponent cheats once, after which the player will cheat forever.
  • How does the 'trigger strategy' deter cheating?
    It threatens permanent retaliation for a single act of cheating, making cheating less attractive.
  • Why might Jack and Jill aim for a collaborative agreement in a repeated game?
    By collaborating, they can both earn higher payoffs over time compared to consistently cheating.
  • What happens if one player cheats in a 'tit for tat' strategy?
    The other player will cheat in the next round as retaliation.
  • What happens if one player cheats in a 'trigger strategy'?
    The other player will cheat in all future rounds, ending cooperation permanently.
  • How do repeated games encourage collusion?
    Because players interact repeatedly, they can enforce agreements and punish cheating, making collusion more stable.
  • What is the main goal for players in long-term repeated games?
    Players aim to maximize their earnings by maintaining cooperation over time.
  • How does the possibility of future interactions affect strategy in repeated games?
    Knowing they will interact again, players are more likely to cooperate to avoid future punishment.
  • What is the immediate consequence for cheating in a repeated game with a 'trigger strategy'?
    The cheater loses the possibility of future cooperation and faces ongoing retaliation.