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PART III . SECTION BEHAVIORAL GAME THEORY Sections and covered a big chunk of territory in the field of behavioral economics , where the focus was on identifying and explaining individual behavior in general . We now venture into the equally enriching territory of behavioral game theory where the focus is again on identifying and explaining human behavior . This time , however , we consider individual behavior in a social setting and , from time to time , assess the advantages and disadvantages of teams of individuals . Referring to the diagram presented in the This Book Approach section , Section of the textbook pertains to the diagrams bottom portion . BEHAVIORAL ECONOMICS
Behavioral Economics Show where analytical game theory fails and adjust the theory . Here , we again demonstrate how standard economic theory ( in this case , game theory ) fails by highlighting the major disconnects between the behavior predicted of Homo and that actually displayed by Homo sapiens in social settings . By social settings , we mean situations where two or more individuals compete against each other for payoffs of some kind ( typically monetary payoffs , but not always ) Most of the games share a tantalizing speaking , the games are structured such that their equilibria correspond to the individuals having chosen not to cooperate with each other . These are the equilibria we expect Homo to reach . Cooperation , if it occurs , is typically evinced by Homo sapiens , not Homo . Are you surprised ?
One thing you will notice as you learn about the games and participate in them yourselves , is that while it does as equally an effective job as the experimental economics of , Thaler , et al . in revealing the extent to which Homo sapiens violate the tenets of rational choice , the of behavioral game theory tends not to propose new or revised theories per se . Rather , the main contributions of behavioral game theory are found in the innovative ways in which the original , foundational 234 ARTHUR
games have been tweaked over time to account for those violations . Unless otherwise indicated , the games presented in this section are based on discussions presented in ( 2003 ) Media Figure ( Section ) Arthur is licensed under a BY Attribution license BEHAVIORAL ECONOMICS PRACTICUM 235