Game Theory

Notes

Claim

Game Theory is a branch of psychology and economics which according to it, interactions between people can be quantified in terms of preferences and expected utility from each action.

Explanation

Meaning, that confessing is a dominant strategy and that the -1,-1 outcome is a nash equilibrium.

Why it matters

This unfortunately shows that when we lack Trust enables reliance on others honesty and good intent, we might fall into worse outcomes than we would have been if we believed in each other and cooperated, and how best intensions can lead to horrible outcomes. It is all about the Incentives shape behavior by making certain actions more attractive.

Examples

The classical case is the prisoner's dilemma. Two people are put in two different rooms, each one is given the option to either shut up or confess. The bottom line is that whether the other one confessed or not, its always good for you to confess. Creating a situation when both are worst off if they only had cooperated.

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Overview

🔼Topic:: behavioral psychology (Map) social science (Map) ◀Origin:: 🔗Link::