Two Very Common Modeling assumptions Rational choice(理性选择):Each person tries to choose the best alternative available to him or her - Equilibrium(均衡): economIc agents interact with each other, resulting in an equilibrium, in which each person reaches an optimal decision given others decisionsTwo Very Common Modeling Assumptions –Rational Choice (理性选择）: Each person tries to choose the best alternative available to him or her. –Equilibrium （均衡）: economic agents interact with each other, resulting in an equilibrium, in which each person reaches an optimal decision given others’ decisions