Fundamental to von Neumann's approach was the assumption that both players were as clever as von Neumann himself. (...)The second problem is that game theory becomes less useful if your opponent is fallible. If player two is not an expert, player one should play to exploit his mistakes rather than defend against brilliant strategies that will never be found. The worse the opponent, the less useful the theory is.

It is a nice quote, isn’t it?

From Logic of Life.

There is nothing irrational about love; indeed, without our passions and our principles, where would the motivation come from to make rational choices about anything? So a world explained by economists is not a world lacking love, hate, or any other emotion. (...) If you’ve read some of the criticisms of economics, you may be starting to fear that you're reading a book about an infamous character by the name of Homo economicus, or "economic man." He's the caricature of what economists are generally supposed to assume about people. Homo economicus doesn't understand human emotions like love, friendship, or charity, or even envy, hate, or anger-only selfishness and greed. He knows his own mind, never makes mistakes, and has unlimited willpower. And he's capable of performing impossibly complex financial calculations instantaneously and infallibly. Homo economicus is the kind of guy who would strangle his own grandmother for a dollar - assuming it didn't take more than a dollar's worth of time, of course.

Logic of Life, raises interesting questions, and lists so many “mistakes” that people make when it comes to “rational choice”. After reading that book, I remember that I felt that the Platonic idea of human rationality and perfectness should be discarded from logic which was thought as a study of how humans should think. Our early ideas of human perfectness captured logic, and then logic got powerful and re-dictated a more complicated version of this perfection back to people. And the result is a mess.

They still call it “non-classical logic”!

Take sex, for instance. We may have it free in the social context, where it is, we hope, warm and emotionally nourishing. But there's also market sex, sex that is on demand and that costs money. This seems pretty straightforward. We don't have husbands (or wives) coming home asking for a $50 trick; nor do we have prostitutes hoping for everlasting love.When social and market norms collide, trouble sets in. Take sex again. A guy takes a girl out for dinner and a movie, and he pays the bills. They go out again, and he pays the bills once more. They go out a third time, and he's still springing for the meal and the entertainment. At this point, he's hoping for at least a passionate kiss at the front door. His wallet is getting perilously thin, but worse is what's going on in his head: he's having trouble reconciling the social norm (courtship) with the market norm (money for sex). On the fourth date he casually mentions how much this romance is costing him. Now he's crossed the line. Violation! She calls him a beast and storms off. He should have known that one can't mix social and market norms—especially in this case—without implying that the lady is a tramp. He should also have remembered the immortal words of Woody Allen: "The most expensive sex is free sex."

Predictably Irrational was one of the first books I read on the subject. And it has a deep game theoretical flavor.

Social norms or conditions should be introduced to game theoretical setting - I think everyone should agree with that.

For me, the real problem is to formalize Kantian deontology within game theory and logic. The crucial point of achieving this should in no way resort to utilitarian value theory obviously. Namely, if we follow Kantian normativity and perform a good action, we should not be doing that good action just because it gives us more “utility’. Then, what is the mathematical modeling of it? What mathematical formulation explains it?