This is a game of choice. do as you please

GAME.py

import time
import random

hp = 20
dg = 0
reaction = 0
happy = 0
pdg = 0
yhp = 30

control = True
while True:

    print ("Actions: 1) Fight     2) Talk     3) Check")
    ACTION = raw_input("Chose:")

    time.sleep(1)

    if ACTION == "1":
        happy = -2
        dg = (random.randint(1, 4))
        if dg == 4:
            print("CRITICAL! person takes 10 dg")
            hp = hp - 10
            print("foe hp is...")
            print(hp)
        elif dg == 3:
            print("person takes 8 dg")
            hp = hp - 8
            print("foe hp is...")
            print(hp)
        elif dg == 2:
            print("person takes 5 dg")
            hp = hp - 5
            print("foe hp is...")
            print(hp)
        elif dg == 1:
            print("MISS, person takes 0 dg")
            hp = hp - 0
            print("foe hp is...")
            print(hp)

    if ACTION == "2" and happy == 0:
        print("you say hi to person")
        reaction = (random.randint(1, 2))
        if reaction == 1:
            print("person says beat it")
            happy = happy - 1
        elif reaction == 2:
            print("person says hi")
            happy = happy + 1
    elif ACTION == "2" and happy == 1:
        print("person smiles at you")
        happy = happy + 1
    elif ACTION == "2" and happy == 2:
        print("person says we should hang out some time")
        happy = happy + 1
    elif ACTION == "2" and happy == -1:
        print("person refuses to talk with you")
    elif ACTION == "2" and happy == -2:
        print("person too scared to talk")

    if ACTION == "3" and happy == 0:
        print("Person: HP: 18, ATT: 1, Not impressive looking ")
    elif ACTION == "3" and happy == -1:
        print("Person: HP: 18, ATT: 1, Rude?")
    elif ACTION == "3" and happy == -2:
        print("Person: HP: 18, ATT: 1, Easy XP")
    elif ACTION == "3" and happy == 1:
        print("Person: HP: 18, ATT: 1, Nice")
    elif ACTION == "3" and happy == 2:
        print("Person: HP: 18, ATT: 1, Really Nice")

    if happy == 3:
        print("you won! gain 0XP and 10PP")
        control = False
        break
    elif hp < 1:
        print("you won! gain 10XP and 0PP")
        control = False
        break
    elif yhp < 1:
        print("--GAME OVER--")
        control = False
        break

    time.sleep(1)

    print("person's turn!")
    if happy == 0:
        print("person looks at you")
    if happy == -1:
        print("person looks at you")
    elif happy == 1:
        print("person smiles at you")
    elif happy == 2:
        print("person smiles at you")
    elif happy == -2:
        print("person stands their ground")
        pdg = (random.randint(1, 3))
        if pdg == 1:
            print("MISS, you take 0 dg")
            yhp = yhp - 0
            print("Your hp is...")
            print(yhp)
        if pdg == 2:
            print("you take 1 dg")
            yhp = yhp - 1
            print("Your hp is...")
            print(yhp)
        if pdg == 3:
            print("CRITICAL! you take 2 dg")
            yhp = yhp - 2
            print("Your hp is...")
            print(yhp)

    if happy == 3:
        print("you won! gain 0XP and 10PP")
        control = False
        break
    elif hp < 1:
        print("you won! gain 10XP and 0PP")
        control = False
        break
    elif yhp < 1:
        print("--GAME OVER--")
        control = False
        break