[klochner]

Many people seem to have game theory backward.

Game theory is a modeling tool that assumes all relevant utility is baked into the payoff matrix.

Games (payoff matrices) that capture unique outcomes/behaviors are often given memorable names from human situations that approximate the games. For example the matrix referred to as 'prisoners dilemma' demonstrates a situation where dominant actions give a suboptimal outcome. In describing where this game may apply, economists found simultaneous interrogations to be a colorful and close enough approximation to the idealized game.

It's not the case that game theorists started with the situation of interrogating prisoners and ended up with the game matrix.

Similarly, for anyone saying that 'that wouldn't happen in real life', you're actually saying that the payoffs don't accurately model the outcomes.

[raverbashing]

> Game theory is a modeling tool that assumes all relevant utility is baked into the payoff matrix.

Correct, and they mostly use the prisioner's dilemma, which is very simplistic, and probably not what it happens in nature (or common situations) most of the time.