Best-response logic presupposes stable expectations; without shared understanding that all players are rational, beliefs can cascade unpredictably across strategic reasoning levels.

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Beliefs cascade(game theory and strategic reasoning): When one person's belief about what will happen influences another person's belief, which then influences a third person's belief, creating a chain reaction that's hard to predict or control.
Best-response logic(game theory and strategic decision-making): A way of thinking where each player in a strategic situation chooses the action that works best for them, given what they believe the other players will do.
Rational: # Rational A rational person is someone who makes decisions based on logic and evidence rather than emotions or hunches. Rational thinking means carefully considering the facts, weighing pros and cons, and coming to conclusions that make sense. It's the opposite of acting impulsively or based on feelings alone.
Shared understanding(game theory and rational decision-making): When all people involved agree on the same basic facts or assumptions—in this case, that everyone is making logical decisions.

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