Game theory: its applications in the context of international relations with a focus on defense and trade strategies by different countries

Abstract

Game theory, though developed initially in the field of mathematics, has increasingly found extreme relevance in modeling, predicting and analyzing behavior in economics, behavioral sciences like psychology and political sciences such as international relations. In last couple of decades a number of studies have been conducted in modeling national and international policies through various game theoretic models such as Prisoner’s Dilemma, Chicken, Bully, Deadlock to name a few. Game theory offers tools to study and predict new alignments, including cases pertaining to political economies such as trade and tariff policies implemented by various countries and trade organizations. For example, rationality of joining WTO or aligning with another trade block is a strategic decision and game theory can aid our understanding of the rationality of a position taken by a player in this context. As classical game theory failed to explain various situations, approaches like game trees and theory of moves have been used to explain many crises in international relations. As most of the decisions taken by players are not one-shot and especially in cases like these where the choice of decision may result into far reaching implications implies players think ahead of time leading to the development of aforementioned theories. Here we have studied WTO negotiations and bilateral treaties, Cuban Missile crisis, Syria-Israel Conflict, International Terrorism and India-Pakistan Relations and modeled them using Game Theory.