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Behavioral Game Theory

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Framing Effect

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The phenomenon where people's decisions are influenced by the way information is presented rather than just the information itself.

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Loss Aversion

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A concept in prospect theory that describes how people are more sensitive to losses than to equivalent gains.

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Regret Theory

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The theory focuses on the idea that people anticipate regret if they make a decision that leads to a poor outcome, and this anticipation affects their choices.

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Ultimatum Game

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A game in which one player makes a division of a resource and the other player can accept or reject the proposal. If rejected, both receive nothing.

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Altruism

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Behavior that benefits other players at a cost to oneself, which can influence outcomes in cooperative games.

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Nash Equilibrium

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A situation in a game where no player can benefit by changing their strategy while the other players keep theirs unchanged.

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Bounded Rationality

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The idea that in decision-making, the rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make decisions.

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Repeated Games

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A series of games played by the same players in which the outcome of a particular game could be influenced by the previous games.

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Evolutionary Stable Strategy (ESS)

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A strategy that, if adopted by a population, cannot be invaded by any alternative strategy that is initially rare. It is a refinement of Nash Equilibrium in the context of biological competition.

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