Research Paper on:
Understanding the Relationship Among Nations Through the Use of Game Theory

Unformatted Sample Text from the Research Paper:
Game theory has proven very useful in the study of many things such as oligopoly markets in which each participant must take account of the reactions of its competitors.  For the purpose of this paper the writer considers the use of game theory in understanding the relationship between the member nations of the United Nations. This is an  intriguing and enlightening look at both the concept of Game Theory in Economics as well as the relationship between various nations. UNDERSTANDING GAME THEORY Game theory is a theory  of rational decision making under conditions of uncertainty. This theory was developed by John von Neumann (1903-1957) and Oskar Morgenstern (1902-1977) in a book entitled The Theory of Games  and Economic Behavior, 1944 (Abbott 2002). Games are usually described as being either zero sum or non-zero sum. Zero-sum games are those where one players gain is  another persons loss. Non-zero sum games open the door to collusion or cooperative action because all players may gain from a certain course of action. PUTTING GAME THEORY  TO USE Currently insurance companies are extremely reluctant to offer insurance against terrorist events. Because insurance companies currently owe more than $50 billion due to the events of September  11, they are reluctant to willingly allow insurance coverage due to the inability to calculate the risk of terrorist events. "The challenge is theres no type of consensus about  what the probability of a terrorist event might be," notes Keith Buckley, managing director at Fitch Ratings, an insurance-ratings firm. "With natural catastrophes, they can look at the historical frequency.  For man-made catastrophes, history doesnt repeat itself" (Oster, 2002, PG). This is the perfect example of the usefulness of game theory, although many analysts disagree on that argument. "To