7. Game theorists routinely assume that all players are rational and that this is common knowledge. However, sometimes p

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7 Game Theorists Routinely Assume That All Players Are Rational And That This Is Common Knowledge However Sometimes P 1 (158.55 KiB) Viewed 28 times

7. Game theorists routinely assume that all players are rational and that this is common knowledge. However, sometimes players may have reason to doubt the rationality of their opponents. Suppose, for instance, that you believe the probability is seventy per cent that the other dude is rational and thirty per cent that they are insane, in which case they seek to minimize rather than maximize their payoff. The payoff matrix for the game in which the other dude is rational looks as follows. Which strategy should you follow? The Other Dude (TOD) х y Z 0,2 1, 1 0,0 You 2, 1 2. 2 1,6 0,0 7,1 0,3 co с