Rationality

Rohit Prasad ()
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Rohit Prasad: Management Development Institute Gurugaon, Economics and Public Policy

Chapter 1 in A Case-Based Approach to Game Theory, 2026, pp 1-28 from Springer

Abstract: Abstract This chapter motivates the study of game theory by introducing its foundational assumption: rationality, or self-interested behaviour. It explores both the value and limitations of this assumption, showing how the pursuit of individual interest can lead to collective action failures like the Prisoners’ Dilemma. The chapter demonstrates how dominant strategy solutions work and applies this reasoning to diverse real-world situations—India-China rivalry, the telecom price war, and the Maoist insurgency. It also interrogates whether game theory is value-neutral or subtly ideological, drawing on examples like the Trump-Kim peace talks. The reluctance to abandon rationality, despite its paradoxes, suggests that it may be more than a simplifying assumption—it may be a credo of the discipline.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-981-95-4302-1_1

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DOI: 10.1007/978-981-95-4302-1_1

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