International Cooperation and Institution Formation: A Game Theoretic Perspective

Chapter
Part of the The Political Economy of the Asia Pacific book series (PEAP)

Abstract

Game theory presents a useful analytical tool for addressing the problem of international cooperation and the formation of institutions. We first examine four problems that must be solved to achieve international cooperation: the common knowledge problem, agreement problem, compliance problem, and participation problem. An institution is a mechanism used to enforce participants to cooperate for collective benefits. We consider a multi-stage game model of institution formation and show that a group of participants voluntarily forms an institution for international cooperation in a strict subgame perfect equilibrium if and only if the group satisfies the criticality condition. Some of the implications on the international frameworks that attempt to prevent the proliferation of nuclear weapons in East Asia are finally discussed.

Keywords

Cooperation Institution International public goods Multi-stage game Voluntary participation 

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Copyright information

© Springer Japan KK 2017

Authors and Affiliations

  1. 1.Institute of Economic Research, Kyoto UniversityKyotoJapan

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