Neuroeconomics and Game Theory

Traditionally, studies of decision making have focused on situations in which people choose between outcomes that only affect themselves, such as playing a lottery where choices are described in terms of outcomes and probabilities and players have to pick the lottery that they prefer. However, many of our decisions in daily life are made in a social context in which the outcome of a decision has consequences not only for one’s self but for others as well, and where we need to consider the desires and values of others before deciding. Game theory is a collection of models for understanding such instances of interactive decision making [1]. These models make clear mathematical predictions about behavior in social situations by describing what strategies decision makers converge on as they try to maximize their payoff. To study complex social processes, such as trust, cooperation, and reputation, game theory offers a rich variety of well-designed multiplayer games. Recently, a new interdisciplinary field