Collapse of cooperation and corruption in a mathematical model within game theory including Moldovan case study (Homo Sociologicus vs Homo Economicus)

TL;DR

This paper presents a game theory model illustrating how cooperation collapses and corruption rises in post-communist Moldova, contrasting rational and reputation-driven decision-making approaches.

Contribution

It introduces a simple, dual-approach model of corruption and cooperation, applying it to Moldova's economic context and analyzing societal outcomes.

Findings

Cooperation collapses in the model under certain conditions.

Reputation and altruism influence strategic choices.

Potential for fairer societal outcomes is discussed.

Abstract

A simple model from game theory, which can imitate a mechanism of corruption and cooperation patterns, is proposed. The settings are divided into two studies with examples related to safety of Moldovan economy. In Homo Economicus world, players seem to act in rational way and decisions are driven by payouts. In Homo Sociologicus world decisions are described by players acquiring reputation and evolving altruism, which in turn determine their choice of strategy (evolution of cooperation). I shall discuss both modeling approaches of Prisoner Dilemma, to understand collapse of cooperation and increase of corruption in postcommunistic countries as Republic of Moldova. Possible more efficient for society outcomes (fairness equilibrium) are also discussed.