Why Rational Players Sometimes Lose: The Paradox of Game Theory
Here’s one of the most unsettling discoveries in mathematics: perfectly rational players, each acting in their own self-interest, can all end up worse off than if they had acted irrationally. This isn’t a flaw in game theory—it’s a feature of reality that game theory reveals. This paradox explains traffic jams, arms races, overfishing, climate change negotiations, and why businesses sometimes engage in destructive price wars. Understanding it will change how you see human cooperation (and its failures). ...