Definition ∞ Behavioral game theory analyzes strategic decision-making by accounting for psychological factors and cognitive biases. It applies principles of game theory while integrating observations of actual human behavior. This field helps predict how participants in economic systems, including decentralized networks, will interact. It offers insights into incentive structures and system design within cryptocurrency protocols. This approach improves understanding of market participant actions.
Context ∞ In the crypto domain, behavioral game theory is increasingly applied to design more robust and secure blockchain protocols. It assists in understanding how validators, miners, and users respond to economic incentives and disincentives. A key area of study involves predicting collective actions in decentralized autonomous organizations and mitigating potential vulnerabilities arising from human decision patterns.
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