Title: On the Importance of Correlations in Rational Choice: A Case for Non-Nashian Game Theory,
Abstract: The Nash equilibrium paradigm, and Rational Choice Theory in general, rely on
agents acting independently from each other. This note shows how this
assumption is crucial in the definition of Rational Choice Theory. It explains
how a consistent Alternate Rational Choice Theory, as suggested by Jean-Pierre
Dupuy, can be built on the exact opposite assumption, and how it provides a
viable account for alternate, actually observed behavior of rational agents
that is based on correlations between their decisions.
The end goal of this note is three-fold: (i) to motivate that the Perfect
Prediction Equilibrium, implementing Dupuy's notion of projected time and
previously called "projected equilibrium", is a reasonable approach in certain
real situations and a meaningful complement to the Nash paradigm, (ii) to
summarize common misconceptions about this equilibrium, and (iii) to give a
concise motivation for future research on non-Nashian game theory.