Individual Rationality in economics and game theory posits that individuals make decisions that maximize their own utility or expected outcomes based on their preferences and available information. In digital asset markets, this concept suggests participants act in their self-interest when trading or engaging with decentralized protocols. It forms a foundational basis for predicting market behavior.
Context
The assumption of individual rationality is a fundamental concept frequently discussed in analyses of market efficiency and the design of economic incentives within blockchain protocols. Debates often explore how psychological biases or incomplete information might lead to deviations from purely rational behavior in volatile cryptocurrency markets. This aspect is key to understanding market dynamics.
This framework leverages zero-knowledge proofs for private mechanism commitment and execution, ensuring verifiable properties without disclosure or mediators.
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