typically assume that people choose among possible actions to maximize the extent to which they achieve their goals
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Contradictions to Rational Choice Model
- Leaving tips at restaurant - Someone who would return lost money to you - The Ultimatum Game - The Prisoner's Dilemma Game
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The Prisoner's Dilemma Game
- Two prisoners are held in separate cells for a serious crime that they did, in fact, commit... - If both parties act selfishly, neither does as well as if they both acted cooperatively
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The Ultimatum Game
- Money game: keep offered money or reject and risk partner getting more - Responders typically reject offers less than 30%; proposers usually offer around a 50/50 split
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Commitment Device
a way of changing incentives so as to make otherwise empty threats or promises credible - ex: blackmail
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Moral Sentiments
emotions that compete with the feelings that spring from rational calculations of self-interest - (anger, guilt, bla) - ex: a strong feeling of guilt altering the actions a person chooses to take (guilt outweighs potential costs) - ex: anger outweighing rationality
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Irrationality
essential ingredient to the emotion of love
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Commonalities between Love and the Rental Housing Makrer