Chapter 3: Human interaction
Over the past 50 years, a powerful new tool has emerged to facilitate this investigation: game theory. The name is not entirely felicitous. There is nothing especially playful about game theory. It is a theory about interactions amongst human beings and would be more aptly, though less elegantly, called the theory of strategic interactions or the theory of interdependent decisions.1 It complements our discussion of rational choice by looking at situations in which the decision- maker faces an intelligent adversary rather than nature. In such situations, one’s best choice depends on what the other player does and vice versa. Game theory has produced significant insights throughout the social sciences: in economics, political science, sociology, anthropology, law and even philosophy.2 It has become a rallying point for the social sciences, throughout the developed world and in all languages.
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