A Comparative Study About Different Modeling Techniques of Game Theory |

ABSTRACT:

Land and property development processes obviously can be seen as asocial situation in which the interaction of individuals or groups ofindividuals is one of the essential elements. To study and understand socialsituations, it is important to analyse how the decisions of actors areinterrelated and how those decisions result in outcomes. In this paper, wepropose a game theoretical modelling approach to analyse it. Hence, theobjective of the paper is to investigate the usefulness as well as thelimitations of game theoretical modelling for analysing and predicting thebehaviour of actors in decision-making processes with respect to thedevelopment of land and property. For that purpose, we have developed gamemodels for the case study of the development of a green field residentiallocation in the Netherlands with respect to the implementation of new Dutchlegislation on cost recovery. Our study demonstrates that game theory could help us to identify thekey strategic decisions of land and property development projects by showingthe different payoffs for stakeholders of their chosen strategies and selectingthe equilibrium in which all stakeholders involved are best of. We also foundmany limitations of using game theory in our case study especially regardingthe assumptions underlying the model. However, we conclude that gametheoretical modelling can be a useful decision support tool in spatialplanning, because it provides a way to think about the complexity of strategicinteraction and, in particular, about the conflicting structure of collectivedecision-making processes.