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by cwp 4406 days ago
> In broad strokes, game theory claims to have a descriptive model of human behavior

Huh? Game theory is the study of strategy. It's not attempting to describe how people actually behave, but how they should behave if they want to achieve a specific outcome when interacting with other people.
2 comments
QuantumChaos 4405 days ago
No, because most games only have Nash Equilbria. Nash Equilibrium assumes that everyone is acting rationally, not just the person you are advising.

Some games, like second price auctions (under certain assumptions about people's values for the good, and knowledge of their own and other people's values) have so called dominant strategy equalibria. In this case, you can say how a person should act regardless of how others act.

But these scenarios are the exception rather than the rule.

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curiouslearn 4405 days ago
No, it does not say how people should behave? It analyzes strategic situations using various equilibrium concepts, such as the Nash equilibrium. If you are not sure that your opponent will play the Nash equilibrium strategy, Game theory doesn't tell you what you should do.
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wspaniel 4405 days ago
That's when you use Bayesian Nash equilibrium or perfect Bayesian equilibrium. No big deal.
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marketforlemmas 4405 days ago
I take some issue with the idea that we can simply just rely on another equilibrium refinement and say "no big deal".

It seems a bit silly to observe some behavior in a game and say "See that's a Nash Equilibrium, so game theory works", and then to turn around and observe some non-NE behavior and say "well in this game, BNE is clearly the right model, so game theory still works". And then yet again to observe some more behavior that conflicts with the theory (or to get rid of silly equilibrium) and say "ah, now we simply use perfect Bayes" or trembling hand equilibrium, or actually we were totally using correlated equilibrium this whole time.

In any case, it feels weird that a theory should behave like the "No true Scotsman" fallacy. We can always get the equilibrium by simply redefining what we mean by equilibrium.

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