Game Theory in the Souk


Jawad Anani asks some interesting questions in light of the recent Nobel Prize in economics award winners.

Do the Arab world and its different countries realize the importance of this theory [game theory] and its applications?

After some interesting examples of bargaining in souks in places such as Beirut, Damascus, and Cairo, he takes a shot at answering his own questions:

But alas, no one in the Arab world deeply understands this theory, its principles, and how it influences the constructive lasting stances. We have paid a huge price in modern history, just because we thought we were skilled negotiators and trained bargainers. But in fact, as the DNA tests have proven, we always lose our balance and equilibrium at the last crucial moment. Hence, we get defeated.


An interesting line but isn't the point he's making a bit off? Poor negotiating skills as an excuse for the lack of economic progress the Arab world has made? I'd argue that the reason is almost entirely to do with the lack of political freedom.


I agree it's not exactly the soundest analysis of the problems of the Arab world. I also agree that one of the central problems in the area is a lack of ability to express political will in anything but a violent manner. (I still contend that this, combined with such a poor basic economy that huge swaths of the population don't truly work or cannot expect anything from their work other than to maintain their life as-is, is a major contributor to suicide terrorism.)

The article is at least interesting, in my view, in that it clearly identifies a connection between the current state of affairs and a gap in some form of education. I found such candor refreshing, even if it's couched in a sort of adversarial format ("we need to know this so we can beat them at the negotiating table"). Unbeknownst to me is whether he has already begun, but one can imagine this being a decent call for more research on things like trade negotiation, dispute resolution, middle-eastern economic interaction, etc. At least, I would hope it leads to/is indicative of that.


What would be really great, is if that at least some small part of what he meant was, 'If we understood game theory, we wouldn't continue to make the bad decisions that have gotten us to where we are today."

I enjoy the blog, keep posting and visit us sometime at


I wrote the article when Economics Nobel prize was announced. My main point as an ex-negotiator in both economic and political arenas, to highlight the importance of understanding the game theory in theory and in its practical manifestations. That was my main aim, and it certainly was not intended to give an overall description of current Arab ills nor a prescription for dealing with them. Thank you all.


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This page contains a single entry by published on October 20, 2005 2:40 PM.

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