Question

Short Answer. Paragraph form:

Must a rational choice always work out well? In other words, is it possible for someone to regret a rational decision? Explain the process and the outcome in detail. ​

Answer 1

Rationality is one of essential base concepts in game theory. It says that an indivdidual will always take his actions taking his best interests in mind. A rational choice however may not always be the best result of a non cooperative game if the other player takes a strategy which is contrary to it. For example in the prisoners dilemma game the non cooperative equilibrium would be when for neither player to cooperate. This would be the rational decision for each player to take, but this would not be Pareto optimal. Given cooperation both players could do better. Thus in this case a rational decision is not the best way to go and the player will regret it. So a rational decision need tot always work out well.