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Dagon comments on A simple game that has no solution - Less Wrong Discussion
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"assume both players are rational. What should player 2 do when player 1 acts irrationally?"
Player 2 should realize that his model is incorrect and come up with a new theory for player 1's motivation. If one is human-like, then two should guess that one was tempted by the shot at the 6 payoff and chose C. Play X.
But unless you can prove that Player 2 would respond with X, you can't tell me that Player 1 is irrational for not picking A.