Don game theorists make a lot of silly assumptions?
As any two-handed economist would answer, “yes and no.” Any model of the real world must make simplifying assumptions because the real world is too messy to analyze with any precision. There is a constant tradeoff between realism and solvability. Even if we could write down a model that accurately described how people make decisions in general, no amount of computers would be able to solve it (since we would, in essence, have to replicate the millions of “human computers” – brains – responsible for real-life interactions). So what assumptions do we make? The most common are rationality (people take whatever actions are likely to make them more happy – and they know what makes them happy), and common knowledge, (we know that everyone else is trying to make himself or herself as happy as possible, potentially at our expense). These assumptions take many mathematical forms, from very strong (and likely unrealistic) to much weaker forms in the study of behavioral game theory. Experimental
