1. Determine which of the following situations describes games and which describes decisions. In each case, indicate what specific features of the situation caused you to classify it as you did.
a) A party nominee for president of the United States must choose whether to use private financing or public financing for her campaign.
b) Frugal Fred receives a $20 gift card from downloadable music and must choose whether to purchase individual songs or whole albums.
c) Beautiful Bells receives 100 replies to her online dating profile and must choose whether to reply to each of them.
d) NBC chooses how to distribute its television shows online this season. The executives consider Amazon.com, iTunes, and/or NBC.com. The fee they might pay to Amazon or iTunes is open to negotiation.
c) China chooses a level of tariffs to apply to American imports.
2. Consider the strategic games described below. In each case, state how you would classify the game according to the six dimensions outlined in the text. (i) Are moves sequential or simultaneous? (ii) Is the game zero sum or not? (iii) Is the game repeated? (iv) Is there imperfect information, and if so, is there incomplete (asymmetric) information? (v) Are the rules fixed or not? (vi) Are cooperative agreements possible or not? If you do not have enough information to classify a game in a particular dimension, explain why not.
a) Garry and Ross are sales representatives for the same company, Their manager informs them that of the two of them, whoever sells more this year wins a Cadillac.
b) On the game show The Price is Right, four contestants are asked to guess the price of a television set. Play starts with the leftmost player, and each player's guess must be different from the guess of the previous players. The person who comes closest to the real price, without going over it, wins the television set.
c) Six thousand players each pays $10,000 to enter the World Series of Poker. Each starts the tournament with $10,000 in chips, and they play No-Limit Texas Hold'Em ( a type of poker) until someone wins all the chips. The top 600 players each receive prize money according to the order of finish, with the winner receiving more than 8,000,000.
d) Passengers on Dessert Airlines are not assigned seats: passengers choose seats once they board. The airline assign the order of boarding according to the time the passenger checks in, either on the Web site up to 24 hours before takeoff or in person at the airport.