What Is Behavioral Game Theory In Behavioral Economics?

Behavioral game theory is a field of study that applies the principles of game theory to better understand how people actually make decisions, rather than assuming that they are perfectly rational. Game theory is a branch of mathematics that studies strategic decision-making, and it is often used to model economic and social interactions. However, traditional game theory assumes that people are perfectly rational, which is not always the case in reality. Behavioral game theory incorporates insights from psychology and behavioral economics to better understand how people’s decisions are influenced by factors such as emotions, social norms, and cognitive biases. This field of study can help to improve the accuracy of game-theoretic models and to provide more realistic predictions of human behavior.

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