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Sensible Irrationality

In the game Traveler¿s Dilemma, two people separately choose a whole number from 2 to 100, and the player whose number is smaller is rewarded with a larger sum. Game theory insists that rationality should lead players to select 2, but most people pick an integer closer to 100.

A new kind of reasoning is needed to gain a rigorous understanding of this rational choice not to be rational.

The results of Traveler¿s Dilemma contradict economists¿ assumption that standard game theory can predict how supposedly selfish rational people will behave. They also show how selfishness is not always good economics.

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