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CAT 2016 Verbal and Reading Comprehension

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Question : 34

Total: 34

The following question consists of a set of five sentences. These sentences need to be arranged in a coherent manner to create a meaningful paragraph. Type in the correct order of the sentences in the space provided below the question.

1. Game theory can also help us to understand how the ongoing Greek bank run could be quelled by European policymakers signalling that a “Grexit" is out of the cards, dispelling asymmetric information in what’s known to game theorists as a “Bayesian game."
2. Using this type of analysis can help us understand better why a “Grexit” is a non-credible threat and what is known to game theorists as a “strictly dominated strategy”.
3. One key question to ask is what makes this default stand-off difference from previous Greek defaults in the past few years?
4. The Nash equilibrium, named after Nash who proved its ubiquitous existence in his 28-page Nobel-prize winning 1951 Ph.D. thesis, was a revolutionary concept that essentially a way to predict the outcome of events in matters of conflict and non-cooperation much like between Greece and Europe in their present stand-off.
5. To understand how the “game" works and identify the Nash equilibrium (the predicted outcome), one must first understand the incentives of all players, namely those of Greece and the rest of Europe

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