Game Theory Reading Answers

Feb 21, 2026

The answers for "Game Theory Reading Answers" include 14 questions and are part of the assessment framework for the IELTS General Reading test. Candidates are allotted 20 minutes to complete the reading responses concerning "Game Theory Reading Answers." This portion of the IELTS reading exam consists of various question formats, including Do the following statements agree with the claims, Choose the correct letter, and Complete each sentence with the correct ending.

The answers for "Game Theory Reading Answers" offer a comprehensive overview of the passage, explaining that Game theory software models human behaviour to predict outcomes in negotiations, auctions, and business decisions, helping organizations gain strategic advantages and save costs. Though limited by unpredictable emotions and data challenges, it may one day assist in mediating conflicts and even preventing wars by forecasting likely results. For additional practice with similar reading assessments, candidates can refer to the IELTS Reading Practice Test section.

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Game Theory Reading Answers

Computer software that models human behaviour can make forecasts outsmart rivals and transform negotiations. According to game theory, our chances of success in negotiations are based on the choices of others. Computer models have been developed to work out how events will unfold as people and organizations act in what they perceive to be their own best interests. Numerical values are placed on the goals, motivations, and influence of players, and likely options are considered. Game theory software then evaluates the ability of each of those players to influence others, and hence predicts the course of events.

Although many individuals would feel uncomfortable having a computer make decisions for them, many organizations run such computer simulations for law firms, companies, and governments. But feeding software with accurate data on all the players involved is especially tricky for political matters. Reinier van Oosten of Decide, a Dutch firm that models political negotiations, notes that predictions may become unreliable when people unexpectedly give in to 'non-rational emotions', such as hatred, rather than pursuing what is apparently in their best interests. However, sorting out people's motivations is much easier when making money is the main object. Accordingly, modeling behavior using game theory is proving especially useful when applied to economics. Using game theory software to model auctions can be very lucrative. Consulting firms are entering the market to help clients design profitable auctions, or to win them less expensively. In 2006, in the run-up to an online auction of radio-spectrum licenses by America's Federal Communications Commission, Dr. Paul Milgrom, a consultant and Stanford University professor in the United States, customized his game theory software to assist a consortium of bidders. He was apprehensive at first, but the result was a triumph. When the auction began, Milgrom's software tracked competitors' bids to estimate their budgets for the 1,132 licenses on offer. Crucially, the software estimated the secret values bidders placed on specific licenses, and determined that certain big licenses were being overvalued. Milgrom's clients were then directed to obtain a collection of smaller, less expensive licenses instead. Two of his clients paid about a third less than their competitors for an equivalent amount of spectrum, saving almost $1.2 billion. Such a saving makes one wonder why everyone isn't using game theory software. And, if they were, how would that affect the game?

PA Consulting, a British firm, designs models for software based on game theory to help its clients solve specific problems in areas from pharmaceuticals to the production of television shows. British government agencies have asked PA Consulting to build models to test zoning rules that govern how many of a certain type of business should be allowed to operate in one area. To give a simple example; if two competing ice-cream sellers share a long beach, they will set up stalls back-to-back in the middle and stay put, explains Dr. Stephen Black, a modeller for PA. Unfortunately for potential customers at the far ends of the beach, each seller prevents the other from relocating - no other spot would be closer to more people. Introduce a third seller, however, and the stifling equilibrium is broken as relocations and pricing changes energize the market. By studying a chain of events such as this, software designers can assess the effect of change and see the patterns in possible outcomes that may occur. As a result, the use of modeling makes clients more inclined to look at future repercussions when making business decisions, Black says.

Where is all this heading? Alongside the increasingly elaborate modeling software, there are also efforts to develop software that can assist in negotiation and mediation. Two decades ago, Dr. Clara Ponsati, a Spanish academic, came up with a clever idea. She accepted that, as negotiators everywhere know, the first side to disclose the maximum amount that it is willing to pay loses considerable bargaining power. Without leverage, it can be pushed backward in the bargaining process by a clever opponent. But if neither side reveals the concessions it is prepared to make, negotiations can become very slow or collapse. However, difficult negotiations can often be pushed along by neutral mediators, especially if they are entrusted with the secret bottom lines of all parties. Ponsati's idea was that if a human mediator was not trusted, affordable, or available, a computer could do the job instead. Negotiating parties would update the software with the confidential information on their bargaining positions after each round of talks. Once positions on both sides were no longer mutually exclusive, the software would be used to split the difference and propose an agreement.

Ponsati, now head of the Institute of Economic Analysis at the Autonomous University of Barcelona in Spain, says such 'mediation machines' could be employed to push negotiations forward by unlocking information that would otherwise be withheld from an opponent. Could mediation which has been achieved using software based on game theory spread from auction bids and utility pricing to resolving political and military disputes?

Today's game theory software is not yet sufficiently advanced to mediate between warring countries. But one day opponents on the brink of war might be tempted to use it to exchange information without having to engage in conflict. According to some game theorists, opponents could learn how a war would turn out, skip the fighting, and strike a deal. Over-optimistic, perhaps - but game theorists do have rather an impressive track record when it comes to predicting the future.

Questions 27-31

Choose the correct letter.

27. What does the writer suggest about game theory software in the first paragraph?

A. Traditional negotiating practices should be used to supplement the software.

B. Success of the software depends on the accuracy of the assigned.

C. This software anticipates the outcome of future events.

D. Future business negotiations will be dominated by this software.

Answer: C

Supporting statement: "Game theory software then evaluates the ability of each of those players to influence others, and hence predicts the course of events."

Keywords: predicts the course of events

Keyword Location: Paragraph 1, final lines

Explanation: The writer explains that the software analyses players and predicts how events will unfold, meaning it anticipates future outcomes.

28. Reinier van Oosten says predicting what people will do works best if

A. Participants are honest about how they feel.

B. There is a good understanding of the client's culture.

C. People strongly dislike the other party.

D. Profit is the primary motivator.

Answer: D

Supporting statement: "However, sorting out people's motivations is much easier when making money is the main object."

Keywords: making money main object

Keyword Location: Paragraph 2, later lines

Explanation: Reinier van Oosten says predictions are more reliable when profit is the main motivation.

29. After using game theory software in 2006, Dr.Milgrom instructed his clients to

A. Buy big licenses.

B. Negotiate with the other parties directly.

C. Make one big offer at the end of the auction.

D. Purchase a mix of licenses.

Answer: D

Supporting statement: "Milgrom's clients were then directed to obtain a collection of smaller, less expensive licenses instead."

Keywords: collection of smaller licenses

Keyword Location: Paragraph 2, later lines

Explanation: This means buying a mix of licenses rather than only big ones.

30. The writer refers to Stephen Black's ice-cream seller example in order to

A. Show the impact new competitors have on business.

B. Highlight the importance of location on business success.

C. Demonstrate that businesses must follow a strategy.

D. Clarify how pricing affects sales.

Answer: A

Supporting statement: "Introduce a third seller, however, and the stifling equilibrium is broken…"

Keywords: third seller, equilibrium broken

Keyword Location: Paragraph 3, middle

Explanation: The example shows how adding a new competitor changes business dynamics.

31. Ponsati believes business negotiations are more likely to progress if

A. A solution is proposed by one of the interested parties.

B. Mediators or computers take over the bargaining process.

C. Both parties follow the rules of negotiating.

D. Sufficient time is allowed for the bargaining process.

Answer: B

Supporting statement: "…difficult negotiations can often be pushed along by neutral mediators…"

Keywords: neutral mediators

Keyword Location: Paragraph 4, middle

Explanation: Ponsati suggests mediators — including computers — can move negotiations forward.

Questions 32-35

Do the following statements agree with the claims of the writer in Reading Passage 3?

YES if the statement agrees with the claims of the writer

NO if the statement contradicts the claims of the writer

NOT GIVEN if it is impossible to say what the writer thinks

32. Game theory software may be unhelpful when dealing with political issues.

Answer: YES

Supporting statement: "…feeding software with accurate data… is especially tricky for political matters."

Keywords: tricky for political matters

Keyword Location: Paragraph 2, early lines

Explanation: This shows the software may be unreliable or unhelpful in political contexts.

33. Dr. Milgrom was confident about applying his software to an auction in 2006.

Answer: NO

Supporting statement: "He was apprehensive at first…"

Keywords: apprehensive at first

Keyword Location: Paragraph 2, middle

Explanation: Dr. Milgrom was initially unsure, not confident.

34. Dr. Ponsati believes 'mediation machines' are an inappropriate method of negotiation in areas other than business.

Answer: NO

Supporting statement: "…could mediation… spread… to resolving political and military disputes?"

Keywords: political and military disputes

Keyword Location: Paragraph 5, later lines

Explanation: Ponsati suggests the idea could extend beyond business, not that it is inappropriate.

35. Military organizations refuse to accept that software based on game theory could prevent wars

Answer: NOT GIVEN

Explanation: The passage discusses possible future use in wars but does not say military organizations reject the idea.

Questions 36-40

Complete each sentence with the correct ending, A-F.

36. According to Reinier van Oosten, game theory software falls when…

Answer: E

Supporting statement: "…predictions may become unreliable when people… give in to 'non-rational emotions'…"

Keywords: non-rational emotions

Keyword Location: Paragraph 2, early lines

Explanation: Software fails when emotions influence decisions.

37. Dr. Milgrom's software is successful in detecting if..

Answer: A

Supporting statement: "…determined that certain big licenses were being overvalued."

Keywords: overvalued

Keyword Location: Paragraph 2, later lines

Explanation: The software detects when something is valued too highly.

38. Dr. Black's game theory software is a helpful tool when…

Answer: D

Supporting statement: "…makes clients more inclined to look at future repercussions…"

Keywords: future repercussions

Keyword Location: Paragraph 3, final lines

Explanation: The software helps businesses consider future developments.

39. According to Dr. Ponsati, negotiators fall behind if…

Answer: C

Supporting statement: "…the first side to disclose… loses considerable bargaining power."

Keywords: disclose maximum amount

Keyword Location: Paragraph 4, early lines

Explanation: Giving away too much information early weakens negotiators.

40. Dr. Ponsati's mediation machine is useful when...

Answer: B

Supporting statement: "…negotiations can become very slow or collapse… pushed along by neutral mediators…"

Keywords: pushed along

Keyword Location: Paragraph 4, middle

Explanation: The mediation machine helps when discussions stall.

A. something is thought to be worth more than it really is.

B. discussions between the parties begin to break down.

C. too much information is given to the other parties early on.

D. businesses consider possible future developments.

E. people allow their feelings to influence decisions.

F. a solution requires face-to-face negotiation

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