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Cooperation dynamics under pandemic risks and heterogeneous economic interdependence.

Manuel Chica1,2, Juan M Hernández3, Francisco C Santos4

  • 1Andalusian Research Institute DaSCI "Data Science and Computational Intelligence", University of Granada, Granada 18071, Spain.

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Summary

Economic interdependence encourages cooperation during global crises like COVID-19 by making free-riding less profitable. Heterogeneity in regional impacts can enhance policy effectiveness for coordinated responses.

Keywords:
COVID-19Collective risk dilemmaEconomic interdependenceEvolutionary game theoryPandemic risks

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Area of Science:

  • Economics
  • Game Theory
  • Public Health

Background:

  • The COVID-19 pandemic highlighted global interdependence, particularly in tourism, due to uncoordinated mobility restrictions.
  • Evaluating the impact of this interdependence on policy decisions (restrictive vs. non-restrictive measures) is complex, especially with diverse economic exposures.

Purpose of the Study:

  • To develop a game-theoretical model analyzing conflicts between controlling global risks and economic impacts.
  • To incorporate economic interdependence and heterogeneous income losses into the model to understand cooperation dynamics.

Main Methods:

  • Developed an analytical and computational game-theoretical model.
  • Incorporated tourism-specific data and heterogeneous income losses for each player (nation/region).
  • Utilized numerical simulations to analyze cooperation dilemmas and policy implications.

Main Results:

  • Economic interdependence was shown to enhance cooperation by reducing the benefits of free-riding.
  • Cross-exposures were found to alter the nature of cooperation dilemmas, affecting game dynamics.
  • Heterogeneity among regions can be leveraged to improve intervention policy effectiveness.

Conclusions:

  • Increased economic interdependence can foster greater cooperation in managing global risks.
  • Understanding regional heterogeneity is crucial for designing effective international policies.
  • The study provides insights into cooperation strategies for future global crises.