Game Theory Defined

Abstract

A sharp distinction is made between normative and descriptive theories of decision. The former is purely deductive and thus can be regarded as belonging to a branch of mathematics. The results of a normative decision theory are not applicable to descriptions or predictions of how people will make decisions in given situations. Given a sufficiently precise definition of a “rational decision,” a normative theory can prescribe one in a given situation. Descriptive decision theory attempts to predict decisions of people in given situations sufficiently precisely described. In his critique of Prisoner's Dilemma, Aaron Wildavsky regards the theory underlying this game as a descriptive (or predictive) theory. For this reason, although his discussion calls attention to many interesting questions relating to people's decision behavior, his conclusions have no relevance to the theory of games.