Page 9 - Azerbaijan State University of Economics

Salah Salimian, Mahdi Movahedi Beknazar, Kiumars Shahbazi, Zahra Khalilzadeh Silabi: The Role
of Investment in the Equilibrium of International Political Economy (Game Theory Approach)

Throughout history, major conflicts between powers have had catastrophic
consequences for human societies. Regardless of the petitions against these
catastrophes and wars, conflict is a pervasive category that may arise between two
companies to access the resources or market share, or between two parties, to gain
seats in parliament or similar cases. The question is whether, in conflict, as part of
history and actions of human societies, balance and optimality can be achieved? This
balance is important in so far as trying to destroy or suppress the opposite side for the
winning side is not the optimal solution (Tabibian, 2010). Accordingly, game theory
using mathematical models analyzed cooperation or competition between rational and
intelligent. The ultimate goal of this knowledge is to find the optimal solution for
players (Myerson, 1991). Game theory has applications in studying a wide range of
subjects including the manner of decision makers' interaction in a competitive
environment such that the results of each agent's decision is effective on the results
achieved by the other agents. In fact, the main structure of game theory in most
analyses includes a multidimensional matrix such that each dimension includes a set
of options and the arrays of this matrix include the results achieved for agents in
respect to various arrangements of the expected options. One of the main conditions
for applying this theory in analysis of competitive environments is the faithfulness of
interacting agents in respecting the logic of the game (Abduli, 2012).

LITERATURE REVIEW
The review of related literature in economy and peace and in game theory confirms
the innovation of the present study. Most of the studies in the field of peace and
economy, some of which have been presented here, mostly utilize game theory to
achieve equilibrium in a certain field (mostly oil and gas) and have not dealt with
peace and economy from a macro perspective. Studies in the field of economics and
peace can be divided into two categories of studies.

The first category is studies that examine a particular aspect of peace (the issue of
cooperation or non-cooperation) between countries. The following researches about
the first category of mentioned studies such as Popescu & Hurduzeu (2015), Nazari
Adli & Khakestari (2016), Salimian & Shahbazi (2017) and Attar et al. (2018) which
have been done by game theory approach.

The second category is studies that examine peace at the international level and have
direct relation to this research.

Yared, (2010) in his study, presented a dynamic theory on war and peace. The results
showed that over a long-term period, if the countries are patient enough, the temporary

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