AS.180.217 Game Theory in Social Sciences Midterm Exam Review 2026 (Qns & Ans)

AS.180.217

Game Theory in Social Sciences


Latest Midterm Exam Review


(With Solutions)



2026




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,1. Case: Two firms simultaneously choose output in a Cournot duopoly.
Demand is P = 100 – Q, MC = 20.
Question: What is each firm’s equilibrium output?
- A. 20
- B. 40
- C. 26.67
- D. 50
Answer: C
Rationale: Cournot equilibrium: Q = (a – c)/(n+1)b = (100–20)/(3) ≈
26.67 per firm.

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2. Case: In a Prisoner’s Dilemma, both players defect.
Question: Why is this outcome stable?
- A. It maximizes joint payoff
- B. It is a Nash equilibrium
- C. It is Pareto efficient
- D. It requires cooperation
Answer: B
Rationale: Defection is each player’s best response given the other’s
choice.

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3. Case: A politician signals competence by pursuing costly education.
Question: Which model explains this?
- A. Screening model
- B. Signaling model
- C. Cournot model
- D. Bertrand model
Answer: B
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, Rationale: Education serves as a costly signal of ability.

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4. Case: In a repeated game, cooperation emerges.
Question: Which strategy sustains cooperation?
- A. Always defect
- B. Tit-for-tat
- C. Random play
- D. Grim trigger
Answer: B
Rationale: Tit-for-tat rewards cooperation and punishes defection.

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5. Case: A candidate chooses policy positions to maximize votes.
Question: Which equilibrium concept applies?
- A. Median voter theorem
- B. Nash bargaining solution
- C. Stackelberg equilibrium
- D. Dominant strategy
Answer: A
Rationale: Candidates converge to median voter preferences.

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6. Case: Two firms set prices simultaneously.
Question: Which model applies?
- A. Cournot
- B. Bertrand
- C. Stackelberg
- D. Hotelling
Answer: B
Rationale: Bertrand competition involves simultaneous price setting.


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