The application of game theory to the analysis of actors in urban management

Document Type : Original Research

Authors
M. Alian 1
M. T. Razavian 1
H. Esmaeilzadeh 1
Z. Fanni 1
K. Farajirad 2
1 Shahid Beheshti University
2 Institute of Social Studies
Abstract


The game theory an interdependent decision-making theory in which, decision-makers have conflicting preferences and the outcome of their decisions cannot be determined by one party or actor alone. The roots of this theory is derive from the decision theory (Samsura, Van der Krabben, & Van Deemen, 2010: 565). However, there is a clear distinction i.e. the decision theory usually analyses decision-making processes from the one player’s point of view, while the game theory emphasizes its analysis through the interaction among many players. Since the game theory focuses on situations in which interactions and interdependency play a role, it can be seen as an extension of the decision theory (Samsura et al., 2010: 564). In other words, the game theory, or the so-called ‘‘interactive decision theory’’, is derived from the decision theory (Tan, Liu, Zhou, Jiao, & Tang, 2015: 17).

The term ‘game theory’ stems from the resemblance of collective decision-making situations to well-known parlor games like chess, poker, and monopoly (Aumann, 1989). Because of its focus on conflicting preferences, the game theory is often defined as a theory of conflict. Aumann has even referred it as ‘Interaction Decision Theory’, since this accurately describes the content and focus of the theory (Samsura et al., 2010: 656).

The game theory is a powerful tool in understanding the relationships that are made and broken in the course of competition and cooperation. It has been widely used in the fields of natural and social sciences, especially in economics after the 1920s, with the groundbreaking work of Von Neumann and Morgenstern (1944), which is considered as ‘‘the classic work upon which the modern-day game theory is based’’(Von Neumann & Morgenstern, 2007: 14). The increased interest in the game theory among social scientists is partly due to the fact that it can solve social problems through finding out optimal solutions in a conflict situation (Tan et al., 2015: 17).

Since then, the game theory has been profoundly influencing other fields in natural sciences, such as biology, physics, and computer science, as well as social sciences, including anthropology, psychology, sociology, politics, and philosophy. The increased attention to this theory especially in social sciences is based on the idea that it can provide solid micro-foundations for the study of collective decision-making processes and structures and social change (Samsura et al., 2010: 565). Urban planning and, in particular, metropolitan and urban management is also one of the branches of social sciences in which the proposed theory is capable of playing a vital role. As such, the present study seeks to answer the following questions:


How is the narrative of the game between actors of urban management field producing and reproducing?
What are the most likely possible outcomes and remedies of the current situation?



Methodology

The problem structuring methods, among new approaches to operations research, believe that the most important step in solving a problem is to identify it. As such, they try their best to investigate the problem by identifying various factors, revealing and hidden relationships between them, and avoiding simplicity and unrealization. Since the game theory is one of the most important of these methods, the present research applies it to introduce and describe the gaming in the field of metropolitan management. By completing the initial assumptions, analysis and determination of the stable status is done using the GMCR+ software.



Results and Discussion

In the first step, people active in managing metropolitan areas are identified and categorized into four main groups: state-government institutions, public-government institutions, public institutions and private sector institutions. Thereafter, alternative metropolitan management actors are listed and finalized with initial reviews and their limitations. In real terms, all theoretical situations and conditions of games (i.e. 512 games) are not possible, and limitations make it to reduce the possible status. The final step in the field of game modeling is to determine priorities and possible preferences for each actor, for which, the prioritization of alternatives was used. The model analysis is based on the stability and balance of the actors. Based on the results of 24 statuses, 4 are equilibrium and 2 statuses are semi-stable.



Conclusion

The results show that there are 24 statuses, 4 equilibrium statuses, and 2 semi-stable statuses among different mode of actions in the areas of metropolitan area management. Status 15 is considered as the most stable one. Based on Nash Equilibrium (R), General Metarationality (GMR), Symmetric Metarationality (SMR), Sequential Stability (SEQ), Limited-move Stability (LM), and Non- myopic Stability (NM) all actors are most beneficial. State-government actors with structural reforms, gradual changes and the necessity of reviewing laws and regulations, as well as recognizing the concept of metropolitan area with respect to political divisions of the country, can provide a structure and an effective state for managing metropolitan areas. Public-government actors can help improve the current state of affairs by facilitating and organizing structural reforms or setting up a regional metropolitan management council. This should be done by removing the weak horizontal interactions among stakeholders in metropolitan region and unhealthy competitions of cities and settlements located in the metropolitan region. People's institutions can also play an active role in managing metropolitan areas with their attempt to participate and influence the management. Furthermore, the principle of confidence as a link between social elements that makes social capital essential, and this can be achieved through decentralizing and distributing powers among all actors and stakeholders.

Keywords

Subjects

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The Journal of Spatial Planning and Geomatics
Volume 22, Issue 4
March 2019
Pages 55-85