Page 8 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.79, # 2, 2022, pp. 4-18

If individuals realize that they could have common profitable cooperation beyond the
borders as well as within borders, they will avoid conflict and war (Jackson &
Sorensen, 2004).

If interdependency is in accordance with liberal or open economic systems, the states
will conclude that their development is dependent on trade. This freedom forces them
to rely on interdependency and develop it. The countries which have some share in
the economy of each other will come to this conclusion that by increasing desirable
trade relations it will divert them away from resorting to military practices to promote
international status. The openness or closeness of economic systems or lack of
economic freedom also has a reverse effect. If countries are not able to continue
trading because of barriers or high tariffs, they try to acquire assets, which they were
not able to acquire through trade from non-peaceful ways such as war. In such a
situation, the grounds for increasing militarism will be laid in the international arena
(Roseckranse, 1996).

In this paper, international economic cooperation and its effect on international
relations (peace) will be studied by presenting a theoretical model. It seeks to answer
this question as to whether economic cooperation in the form of international
investment could prevent war and reduce political tensions or not? The present study
tries to provide a scientific response to this question using “Game theory”.

CONFLICTING PROPOSITIONS AND GAME THEORY
Since Plato,-if we imagine him as a symbolic founder of rationality, human beings
had some basic beliefs in the theory of rational thinking that lasted until the second
half of the 20th century without facing any serious challenge. Some of them include:
"Every proposition is either true or false", "every correct proposition can be proved
anyway, although it may be difficult to prove", "resolving any conflict is equal to
defeat of one or both of parties". Some of the intellectual achievements of the
twentieth century, and specifically the second half of the twentieth century, include
challenging these type of conclusions by logicians and in particular, mathematicians.
In the first case it was proved that there are many propositions that are neither true nor
false. This has led to changes in some mathematical disciplines that yielded interesting
achievements. Concerning the second case, it was proved that there are many correct
and true propositions that cannot be proved; rather, the dimension of unverifiable
correct options is wider than verifiable and provable propositions. This subject did not
only show the limitations and confinement of human rationality; it also opened up a
new and wider range of rationality to humanity. The origin of game theory is in the
third area of logicians' achievements in the twentieth century; i.e. the possibility of
cooperation and balance in conflict (Tabibian, 2010).

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