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Can we predict human behaviour with game theory? by cryptocopy

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Can we predict human behaviour with game theory?
<p>Not necessarily. Game theory cannot accurately predict human behavior because in the real world human beings can behave in irrational ways and make emotionally-loaded decisions that render Game Theory's assumptions ineffective. Nonetheless, given a limited set of choices, a limited set of outcomes, and intelligent, rational actors, it could be used to predict human behavior, but only in these limited situations.&nbsp;</p>
<p>Game theory is <em>“the study of mathematical models of conflict and cooperation between intelligent rational decision makers”</em>. Basically, game theory looks into how people make decisions and is used to provide insights into why we make the decisions we do.&nbsp;</p>
<p>So, can it be used to predict human behavior? The short answer is no. We have to understand that as much as we want to think of ourselves as rational actors, we don't always make decisions rationally. Our emotions, our beliefs, intents, desires, emotions, past experiences, and knowledge all play a part in the decision-making process, such that, more often than not, our decisions are more emotionally-charged than rational.</p>
<p>For example, consider a person who has been betrayed before. In the classic case of the <em>Prisoner's Dilemma</em> where two prisoners who committed the same crime are caught and separated under interrogation, Game Theory suggests that the best rational decision is to not confess because under the circumstances, it will guarantee a shorter sentence for both prisoners.&nbsp;</p>
<p>However, a person who has experienced betrayal in the past may not be so keen to trust that the other prisoner will not confess, too. This may prompt him to choose the irrational act of confessing, rather than keeping quiet. Or, what if the person being interrogated has recently fought with the other prisoner, he may choose to cooperate with his interrogators just to spite the other guy and it would have nothing to do with Game Theory.&nbsp;</p>
<p>Thus, throwing in the extra variable of a past experience or an irrational emotion, makes the situation more complex, and consequently, makes it more difficult for Game Theory to accurately predict human behavior in the real world.</p>
<p>So, what's the value of Game Theory, then? While it is impossible to accurately predict human behavior in the real world, Game Theory has been used more as a framework to study how we arrive at the decisions we make, and to serve as an ideal on finding the best and most rational decision we should take in a given situation. For example, it could be used to advice businessmen during a negotiation. Granted, there is no guarantee that the other party will act rationally, but it could at least serve as a guide on the best rational decision for you and your situation.&nbsp;</p>
<p>Hope this helps.</p>
<p>Sources:</p>
<ol>
  <li>Game Theory. https://en.wikipedia.org/wiki/Game_theory</li>
  <li>Game Theory and Human Behavior (Introduction and Examples). https://imotions.com/blog/game-theory-introduction-examples/</li>
  <li>Game Theory for Parents. https://www.scientificamerican.com/article/game-theory-for-parents1/</li>
</ol>
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