Much of human behavior only seems irrational

This talk shows how three aspects of human behavior that seem irrational are actually rational:

1) I first present recent work on persona games that explains more features of human behavior in the ultimatum game as actually being rational. I also present new work on persona games that has uncovered an unavoidable tradeoff in the Prisoner's Dilemma: The greater the benefit of cooperation, the less robust that cooperation is against noise.

2) Next, experimentally, a major factor determining an individual's happiness is whether their neighbor is wealthier than they are, no matter what their wealth. I present a model in which marginally greater wealth of a neighbor provides information advising you that exploring for a new strategy is likely to make you wealthier. This can explain unhappiness at a neighbor's marginally greater wealth: it is an emotional ''prod'' that causes you to explore for a new strategy, a prod that substitutes for the full computation of whether to explore.

3) Finally, I present a similar model that explains why people are unhappy if their current wealth is less than their recent wealth, no matter what their current wealth.