The observation that individuals do not act only on narrow self-interested motives means that
A) game theory is nearly useless.
B) behaviour appears random.
C) new avenues are available for solving commitment problems.
D) society has become more enlightened.
E) the accuracy of game theory predictions has improved.

Question

Quizplus · Accepted Answer

The observation that individuals do not act only on narrow self-interested motives means that new avenues are available for solving commitment problems. This is because individuals can be motivated by a sense of fairness, reciprocity, or social norms, which can help overcome commitment problems that might arise in situations where self-interested behavior would lead to an undesirable outcome for all parties involved. This insight has led to the development of various mechanisms, such as reputation building or social norms enforcement, that can help ensure that individuals stick to their commitments even in the absence of formal contracts or legal enforcement.

The Observation That Individuals Do Not Act Only on Narrow