Search results

The ultimate goal of game theory is to provide a theoretical model for strategic situations' analysis, i.e. for situations where one actor's choice depends on the behavior of other players in the game. As a concept, game theory is also applicable to the legal context. Legal dialectics and processes are often conducted in some form of strategic interactions. Game theory is a way to see how legal rules affect particular actors' behavior. International Economic Law has its own dynamics which makes the process similar to the analysis through the game theoretical tools. Therefore, the rules of international law are considered as the rules of the game that are taking place among different actors. Game theoretical considerations clarify the substance of the interaction and cooperation of players involved (states, international organizations and other actors). Game theory provides a basis for normative analysis of the issue of implementation of the rules of international law and improves understanding of those rules. The topic of the paper is the application of the game theory in the context of the legal framework established by the World Trade Organization. The member states' dilemma between using the advantages and liberalization options provided by the WTO on the one hand, and joining the regional trade agreements, on the other one, is strategic by nature. Therefore, game theory can contribute to understanding and resolving, using the game of 'prisoner's dilemma' as a model. It is the game which clearly shows that a group of rational egoists can end up worse than a group of actors that acts prima facie contrary to their own interests. 'Prisoner's dilemma' demonstrates why society and law has the need for coordination as well as mechanisms for co-operation. WTO member states put emphasis on the process of liberalization conducted in the framework of regional trade agreements (RTAs); at the same time, their participation in WTO negotiations is not effective and efficient enough to make a breakthrough in the multilateral framework. A solution of the game for Member States is not to cooperate: i. e, liberalization is primarily achieved through regional agreements rather than within the WTO. The rational decision of the Member States (opting for a regional approach) has resulted in a suboptimal result, which is a basic characteristic of the game model based on a prisoner's dilemma: in this case, the optimal solution would be cooperation through a multilateral framework (World Trade Organization).