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Behavioral Game Theory
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Flashcards
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Framing Effect
The phenomenon where people's decisions are influenced by the way information is presented rather than just the information itself.
Loss Aversion
A concept in prospect theory that describes how people are more sensitive to losses than to equivalent gains.
Regret Theory
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.
Ultimatum Game
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.
Altruism
Behavior that benefits other players at a cost to oneself, which can influence outcomes in cooperative games.
Nash Equilibrium
A situation in a game where no player can benefit by changing their strategy while the other players keep theirs unchanged.
Bounded Rationality
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.
Repeated Games
A series of games played by the same players in which the outcome of a particular game could be influenced by the previous games.
Evolutionary Stable Strategy (ESS)
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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