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The theory allows for rational and irrational decisions because both are examined using real-life experiments in the form of simple games. Simple games are often used in behavioral game theory research as a way of analyzing unexplored phenomena, such as social preferences and social utility, that are not explored in traditional game theory. [1]
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Irrational behavior can be useful when used tactically in certain conflict, game and escape situations. The moves of an irrational opponent are not (or only very limitedly) predictable. An irrational negotiator cannot be put under rational pressure. [52] An indirect tactic is the rational use of the irrationalism of third parties.
Carl Jung developed the theory of cognitive processes in his book Psychological Types, in which he defined only four psychological functions, which can take introverted or extraverted attitudes, as well as a judging (rational) or perceiving (irrational) attitude determined by the primary function (judging if thinking or feeling, and perceiving ...
If both players are rational and both know that both players are rational and everything that any player knows is known to be known by every player (i.e., player 1 knows player 2 knows that player 1 is rational and player 2 knows this, etc. ad infinitum – common knowledge), play in the game will be as follows according to perfect Bayesian ...
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