In economics and game theory, a participant is considered to have superrationality (or renormalized rationality) if they have perfect rationality (and thus maximize their utility) but assume that all other players are superrational too and that a superrational individual will always come up with the same strategy as any other superrational thinker when facing the same problem. Applying this definition, a superrational player playing against a superrational opponent in a prisoner's dilemma will cooperate while a rationally self-interested player would defect.

Monarchy, where the divine right of kings establishes the political legitimacy of the rule of the monarch (king or queen); legitimacy also derives from the popular perception (tradition and custom) and acceptance of the monarch as the rightful ruler of nation and country. Contemporarily, such divine-right legitimacy is manifest in the absolute monarchy of the House of Saud (est. 1744), a royal family who have ruled and governed Saudi Arabia since the 18th century. Moreover, constitutional monarchy is a variant form of monarchic political legitimacy which combines traditional authority and legal–rational authority, by which means the monarch maintains nationalist unity (one people) and democratic administration (a political constitution)

In political science, legitimacy is the right and acceptance of an authority, usually a governing law or a regime. Whereas authority denotes a specific position in an established government, the term legitimacy denotes a system of government—wherein government denotes "sphere of influence"

Arrow's impossibility theorem, the general possibility theorem or Arrow's paradox is an impossibility theorem in social choice theory that states that when voters have three or more distinct alternatives (options), no ranked voting electoral system can convert the ranked preferences of individuals into a community-wide (complete and transitive) ranking while also meeting the specified set of criteria: unrestricted domain, non-dictatorship, Pareto efficiency, and independence of irrelevant alternatives. The theorem is often cited in discussions of voting theory as it is further interpreted by the Gibbard–Satterthwaite theorem.

The Bondareva–Shapley theorem, in game theory, describes a necessary and sufficient condition for the non-emptiness of the core of a cooperative game in characteristic function form. Specifically, the game's core is non-empty if and only if the game is balanced. The Bondareva–Shapley theorem implies that market games and convex games have non-empty cores. The theorem was formulated independently by Olga Bondareva and Lloyd Shapley in the 1960s.

In game theory, the Nash equilibrium, named after the mathematician John Nash, is the most common way to define the solution of a non-cooperative game involving two or more players. In a Nash equilibrium, each player is assumed to know the equilibrium strategies of the other players, and no one has anything to gain by changing only one's own strategy.[1] The principle of Nash equilibrium dates back to the time of Cournot, who in 1838 applied it to competing firms choosing outputs

The Prisoner's Dilemma is an example of a game analyzed in game theory[citation needed]. It is also a thought experiment that challenges two completely rational agents to a dilemma: cooperate with their partner for mutual reward, or betray their partner ("defect") for individual reward. This dilemma was originally framed by Merrill Flood and Melvin Dresher while working at RAND in 1950[citation needed]. Albert W. Tucker appropriated the game and formalized it by structuring the rewards in terms of prison sentences and named it "prisoner's dilemma".[1] William Poundstone in his 1993 book Prisoner's Dilemma writes the following version:Two members of a criminal gang are arrested and imprisoned. Each prisoner is in solitary confinement with no means of speaking to or exchanging messages with the other. The police admit they don't have enough evidence to convict the pair on the principal charge. They plan to sentence both to a year in prison on a lesser charge. Simultaneously, the police offer each prisoner a Faustian bargain.The possible outcomes are: A: If A and B each betray the other, each of them serves 5 years in prison B: If A betrays B but B remains silent, A will be set free and B will serve 10 years in prison C: If A remains silent but B betrays A, A will serve 10 years in prison and B will be set free D: If A and B both remain silent, both of them will serve 2 years in prison (on the lesser charge).

Research has already begun to illustrate how social exchange can act directly on the brain's reward system, how affective factors play an important role in bargaining and competitive games, and how the ability to assess another's intentions is related to strategic play. These findings provide a fruitful starting point for improved models of social decision-making, informed by the formal mathematical approach of economics and constrained by known neural mechanisms.

Rational choice theory refers to a set of guidelines that help understand economic and social behaviour.[1] The theory originated in the eighteenth century and can be traced back to political economist and philosopher, Adam Smith.[2] The theory postulates that an individual will perform a cost-benefit analysis to determine whether an option is right for them.[3] It also suggests that an individual's self-driven rational actions will help better the overall economy. Rational choice theory looks at three concepts: rational actors, self interest and the invisible hand.

In rational choice theory, human individuals or groups can be modelled as 'actors' who choose from a 'choice set' of possible actions in order to try to achieve desired outcomes. An actor's 'incentive structure' comprises (its beliefs about) the costs associated with different actions in the choice set, and the likelihoods that different actions will lead to desired outcomes. In this setting we can differentiate between: outcome power – the ability of an actor to bring about or help bring about outcomes; social power – the ability of an actor to change the incentive structures of other actors in order to bring about outcomes. This framework can be used to model a wide range of social interactions where actors have the ability to exert power over others. For example, a 'powerful' actor can take options away from another's choice set; can change the relative costs of actions; can change the likelihood that a given action will lead to a given outcome; or might simply change the other's beliefs about its incentive structure.

Accordingly, the cooperative principle is divided into Grice's four maxims of conversation, called the Gricean maxims—quantity, quality, relation, and manner. These four maxims describe specific rational principles observed by people who follow the cooperative principle in pursuit of effective communication

The monotonicity criterion is a voting system criterion used to evaluate both single and multiple winner ranked voting systems. A ranked voting system is monotonic if it is neither possible to prevent the election of a candidate by ranking them higher on some of the ballots, nor possible to elect an otherwise unelected candidate by ranking them lower on some of the ballots (while nothing else is altered on any ballot).[1] That is to say, in single winner elections no winner is harmed by up-ranking and no loser is helped by down-ranking. Douglas Woodall called the criterion mono-raise.