PUP-3002 Lecture Notes - Lecture 2: Situation Two, Strategic Dominance, Game Theory
Document Summary
Often times, individuals don"t want you to cooperate. A mathematical tool to study strategic decision making. The study of how actors make decisions exogenous externally determined the actor decisions have not impact on exogenous factors endogenous internally determined the actors decisions have an impact of endogenous factors. Individual choice and preferences have implications for group decisions. Rational choice: patterns of behavior in societies reflect the choices made by individuals as they try to maximize their benefits and minimize their costs . Weigh the costs and benefits of all choices. Express and pursue what they deem best. If an actor is rational they will select the choice that gains them the highest utility. A=2, b=1; b is preferred to a. A=2, b=1; a is preferred twice as much as b. Between two items in a set, , preferences can be . In order to be rational, preferences must be. Transitive: if a>b & b>c, then a>c.
