Anyone who follows this blog regularly knows that I like models, heuristics and algorithms as a means to analyze problems and develop better solutions. I am also very interested in economic development as these posts show. What could be better than a paper that applies game theory to economic development analysis. Dimiter Ialnazov and Nikolay Nenovsky have just released a paper, "A Game Theory Interpretation of the Post-Communist Evolution", which deals with the pace of economic development in Eastern European countries after the end of the Cold War.
The two main models of cooperation, namely the "prisoner’s dilemma" and the "stag hunter" (classic game theory models), are applied to basically conclude that the greater the homogeneity of beliefs and objectives the greater the economic development. The "stag hunter" model is the model for cooperation more evident in homogeneous groups.
Nice to see the mathematicians confirming long held beliefs in economic development. Would be interesting to see game theory applied to African economic development results.
Image credit: http://www.beyondintractability.org/essay/prisoners_dilemma/
