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Seinfeld Economics: The Nose Job
by Linda Ghent `

A trade-off refers to giving up one thing in return for something else. It implies a decision to be made with both an upside and downside of a particular choice.

Game theory attempts to mathematically capture behavior in strategic situations, or games, in which an individual's success in making choices depends on the choices of others. Game theory has been used to study a wide variety of human and animal behaviors. It was initially developed in economics to understand a large collection of economic behaviors, including behaviors of firms, markets, and consumers. The use of game theory in the social sciences has expanded, and game theory has been applied to political, sociological, and psychological behaviors as well.

A commitment device is a way of changing incentives so as to make otherwise empty threats or promises credible. 

 

This Commentary is related to the following Clips:
Seinfeld: The Nose Job by Larry David & Jerry Seinfeld (1991) Jerry fights an inner war over a woman he hates, but who gives him great sex. In an attempt to break himself of her, Jerry has Kramer tear up her phone number.