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<div> <p><strong>Two MIT economists show how game theory—the ultimate theory of rationality—explains irrational behavior </strong></p> <p>We like to think of ourselves as rational. This idea is the foundation for classical economic analysis of human behavior, including the awesome achievements of game theory. But as behavioral economics shows, most behavior doesn’t seem rational at all—which, unfortunately, to cast doubt on game theory’s real-world credibility. </p> <p>In <em>Hidden Games</em>, Moshe Hoffman and Erez Yoeli find a surprising middle ground between the hyperrationality of classical economics and the hyper-irrationality of behavioral economics. They call it hidden games. Reviving game theory, Hoffman and Yoeli use it...</p> </div>
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