# Conclusion

This lecture introduced game theory and mentioned some of its applications and limits. The limits motivated considering team reasoning. According to its proponents, some social interactions are better modelled by team reasoning than by game theory. But is this true?

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## Notes

At this point you should know what a game is and how games are represented by game theorists. You should also be comfortable with some basic game-theoretic notions, dominance and the nash equilibrium, and how these can be used in an attempt to specify general principles about what rational agents should do in a game.

Because game theory is an extension of decision theory, deriving general principles in game theory relies on the axioms needed for decision theory (see What Are Preferences?). In addition, game theorists rely on some further assumptions. A key assumption is this: not only are all the agents rational, but it is common knowledge to the agents that they are all rational.

The successful applications of game theory indicate that it is a useful model; but its limits suggest that it cannot be the whole story about interaction among rational agents.

The limits motivated considering team reasoning, which is supposed to provide a better model of social interactions than game theory alone can.

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## Glossary

*strictly dominates*another if it ensures better outcomes for its player no matter what other players choose. (See also weak dominance.)

## References

*Beyond individual choice*. Princeton: Princeton University Press. Retrieved from http://webcat.warwick.ac.uk/record=b3272720~S1

*Game theory: A critical introduction*. London: Routledge. Retrieved from http://webcat.warwick.ac.uk/record=b2587142~S1

*Theory of Games and Economic Behavior*. Princeton, N.J. ; Woodstock: Princeton University Press.

*The foundations of mathematics and other logical essays*. London: Routledge.

*Games and information: An introduction to game theory*(4th ed). Malden, MA ; Oxford: Blackwell Pub.

*Economica*,

*40*(159), 241–259. https://doi.org/10.2307/2552796

*The Economic Journal*,

*101*(407), 751–785. https://doi.org/10.2307/2233854