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The prisoner's dilemma is a game theory thought experiment involving two rational agents, each of whom can either cooperate for mutual benefit or betray their partner ("defect") for individual gain. The dilemma arises from the fact that while defecting is rational for each agent, cooperation yields a higher payoff for each.
Rational choice theory provides a framework to explain why groups of rational individuals can come to collectively irrational decisions. For example, while at the individual level a group of people may have common interests, applying a rational choice framework to their individually rational preferences can explain group-level outcomes that ...
The empirical fact that subjects in most societies contribute anything in the simple public goods game is a challenge for game theory to explain via a motive of total self-interest, although it can do better with the "punishment" variant or the "iterated" variant; because some of the motivation to contribute is now purely "rational" if players ...
The mythological Judgement of Paris required selecting from three incomparable alternatives (the goddesses shown).. Decision theory or the theory of rational choice is a branch of probability, economics, and analytic philosophy that uses the tools of expected utility and probability to model how individuals would behave rationally under uncertainty.
A normative theory is subjective and based on opinions. Because of this, normative theories cannot be proven true or false. Behavioral game theory attempts to explain decision making using experimental data. [14] The theory allows for rational and irrational decisions because both are examined using real-life experiments in the form of simple ...
As of 1983, experimenters had identified that success on the Wason selection task was highly context-dependent, but there was no theoretical explanation for which contexts elicited mostly correct responses and which ones elicited mostly incorrect responses. [14] Each card has an age on one side and a drink on the other.
This game is a common demonstration in game theory classes. It reveals the significant heterogeneity of behaviour. [11] It is unlikely that many people will play rationally according to the Nash equilibrium. This is because the game has no strictly dominant strategy, so it requires players to consider what others will do.
The classical explanation of the ultimatum game as a well-formed experiment approximating general behaviour often leads to a conclusion that the rational behavior in assumption is accurate to a degree, but must encompass additional vectors of decision making. [23]