Erosion of belief in “social rationality”: How game theory and social choice theory changed the understanding and modeling of social rationality

Abstract

This article discusses how the developments in game theory and social choice theory profoundly transformed our understanding and modeling of social rationality in the social sciences due to the erosion of the concept of social optimum. I discuss the Prisoner’s Dilemma and relevant examples of social situations, analyze the difficulties that arise when games are repeated, and finally, check how the main results of social choice theory influenced our understanding of the “best” social outcome.