This post continues the discussion on rational choice theory from Note #16. Now, I explore the core assumptions of rational choice theory and their application in the 1967 Arab-Israeli War.
Previously, we’ve seen an application of game theory in assessing a wartime decision and a bit of the debate surrounding the rational choice theory school. Now, let’s dive in deeper into the rationalistic school and explore the core assumptions, which include bargaining theory, brinkmanship, and miscalculations/misperception.
Of course, this means borrowing a lot from behavioural economics, so we’ll have names such as Von Neumann and Thomas Schelling.