Topic 16: Game Theory and Chicken

People do usually make rational choices. They make choices that are best for them, sometimes not thinking about the results for others. We think about what's best for us and then act according to our thoughts. However, not ALL people make rational choices. Sometimes people may make mistakes or can be affected by a sudden impulse. This sudden impulse or emotional response may lead to a irrational choice because when people are emotional, they do not think as much. The "bad outcome" is usually inevitable because people pursue self-interests. They make rational choices that's best for them, thus leading them to the Nash equilibrium. Everyone uses the same strategy and none thinks what's best for the whole group. Therefore, the "bad results" are inevitable. Only when people think about the group as a whole would they be able to avoid the "bad outcome". However, this rarely happens. To create a better outcome for a group, people have to communicate with each other within the group in order to create the best results. People also need to trust each other in order for the results to work out. Trust is really important because if one person says that he will do this but ends up lying and cheating, it will create bad results too.