Game Theory in Harmonizing International TradeAgreements: a Balance Between Foreign InvestorProtection and Regulatory Sovereignty

As all the social sciences subjects are somehow related using economic theories in lawwould be an asset to further examining the issues in legal systems. Trading betweencountries goes back to ۲۵۰۰BC to land called Mesopotamia and has been going on tothis day and as the world has evolved with globalization and regulations it needscloser look. Game theory suggest when choosing a decision you take into account thechoice of other players too, as the case of trading; an investor when investing incountry takes into account what the country is actually looking for are they looking fora way to fill in their debt? Are they looking for globalizing? In other hand the countrychoses an investor that fits with its game plan(strategy). For instance China needednatural resources to fulfill the needs of booming industrial economy, so it startedinvesting in Australia’s mining companies as putting these two players into gametheory equation the result would be: China(securing resources while avoidinggovernment interfere) Australia(economic benefit while maintaining nationalinterests). Therefore as the world of international trade agreements is a complicatedarena using this theory would help to give a framework to harmonize the relationshipbetween the state-investor and it would ensure fair and equitable outcomes for bothparties.

Keywords:

Investor , Game theory , International trade , Regulatory sovereignty