Module 4 Final Quiz: Economic Strategy and Negotiation
Module 4 Final Quiz
Due No due date Points 20 Questions 20 Time Limit 60 Minutes
Attempt History
Attempt Time Score
LATEST Attempt 1 21 minutes 20 out of 20
...
Module 4 Final Quiz: Economic Strategy and Negotiation
Module 4 Final Quiz
Due No due date Points 20 Questions 20 Time Limit 60 Minutes
Attempt History
Attempt Time Score
LATEST Attempt 1 21 minutes 20 out of 20
Correct answers are hidden.
Score for this quiz: 20 out of 20
Submitted May 2 at 16:06
This attempt took 21 minutes.
Question 1 1 / 1 pts
JJ and PW are in a negotiation that involves each party simultaneously
choosing their strategy. JJ can either offer a high (H) or a low (L) price.
PW can opt to Accept (A) or reject (R). If JJ opts for H and PW A, the
payoffs are 20 to JJ and 25 to PW. If JJ opts for H and PW R, the
payoffs are 15 to JJ and 18 to PW. If JJ goes L and PW A, the payoffs
are 27 to JJ and 15 to PW. Finally, if JJ goes L and PW R, the payoffs
are 22 and 14, to JJ and PW, respectively. Which of the following
statements are true?
The Nash equilibrium in the negotiation is (H, R).
This negotiation resembles a prisoners’ dilemma.
The Nash equilibrium is (L, R)
The Nash equilibrium is (H, A)
JJ has a dominant strategy to set a high (H) price.2020/5/2 Module 4 Final Quiz: Economic Strategy and Negotiation
https://canvas.sydney.edu.au/courses/23912/quizzes/94190 2/12
Question 2 1 / 1 pts
William owns a car that he values at $3000. Jackson values the car at
$5000. The negotiations between them for a potential trade are as
follows: William offers a price to Jackson. If Jackson accepts, trade
takes place at that price. If Jackson rejects no trade takes place.
William keeps the car and Jackson gets a payoff of $0. What will the
outcome be of the negotiation process?
William suggests Jackson pay $5000 and Jackson accepts the deal.
William suggests Jackson pay $8000 and Jackson accepts the deal.
William suggests Jackson pay $3000 and Jackson accepts the deal.
William suggests Jackson pay $3000 and Jackson rejects the deal.
William suggests Jackson pay $4000 and Jackson accepts the deal.
Question 3 1 / 1 pts
Doc and Brewster are in a negotiation over royalties. The negotiations
proceed as follows. Doc can make an offer that is either high (H),
medium (M) or low (L). Having received the offer, Brewster can either
accept (A) or reject (R) any offer received. The payoffs are as follows. If
an offer of H is accepted, the payoffs are (30, 8) to Doc and Brewster,
respectively. If an offer of H is rejected, the payoffs are (18, 16). If an
offer of M is made and accepted, the payoffs are (20, 8). If an M offer is
rejected the payoffs are (5, 5). If a low offer is made and accepted the
payoffs are (30, 5) and if an of L is rejected the payoffs are (10, 15). In
the subgame perfect equilibrium outcome Doc receives a payoff of
.
202020/5/2 Module 4 Final Quiz: Economic Strategy and Negotiation
https://canvas.sydney.edu.au/courses/23912/quizzes/94190 3/12
Question 4 1 / 1 pts
Chrissie owns a vintage guitar that she values at $0. Mark would like to
buy the guitar and values it at $1000. The negotiations are as follows.
Chrissie suggests a price to Mark. If Mark agrees trade takes place at
the agreed price. If Mark rejects the offer, negotiations end and each
party receives a payoff of $0. What is the outcome of the negotiations?
Trade takes place at a price of $500
Trade takes place at a price of $100
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