Utility, Games, and Narratives

This chapter provides a general overview of theories and tools to model decision-making. In particular, utility maximization and its application to collective decision-making, i.e. Game Theory, are discussed in detail. The most important exemplary games are presented, including the Prisoner’s Dilemma, the Game of Chicken and the Minority Game, also known as the El Farol Bar Problem. After discussing the paradoxes and pitfalls of utility maximisation an alternative approach is introduced, which is based on appropriateness of decisions rather than consequences. An assessment of the pros and cons of competing approaches to modelling decision making concludes the chapter.