A Game Theoretic Explanation of Economic Growth

Salman Sakir

Applied Economics and Finance, 2016, vol. 3, issue 1, 15-22

Abstract: This paper uses game theory to explain economic growth. It explores a possible reason outside the purview of conventional explanations of economic growth. The paper does not consider natural resources, human capital or capital endowment of a country in determining it being rich or poor. Alternatively, it uses game theory to capture the inconspicuous features of a society that may lead to it being prosperous or not. It shows that cooperative games among the citizens lead a poor country to become rich over time while non-cooperative games can make a developed country become poor over time. Also, the paper provides real life explanations supporting this notion. Finally, the paper explores possible reasons for societies choosing cooperative and non-cooperative games.

Keywords: Game Theory; Cooperative Games; Non-cooperative games; Repeated games; Economic Growth (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:rfa:aefjnl:v:3:y:2016:i:1:p:15-22

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