What Game Theory Teaches Us About Sustainability and Economics

November 8, 2024

Striving for a Balanced Economic System

Game Theory, developed in part by economist and mathematician John Nash, explores how individuals make decisions in strategic situations where their choices affect, and are affected by, the actions of others. Initially applied in economics, diplomacy, and competitive settings, Game Theory also offers profound insights into building balanced and sustainable economic systems. By promoting diversity, resource-sharing, and cooperation, Game Theory can reshape our approach to sustainability, creating economies that prioritize survival, resilience, and long-term well-being for all.


The Basics of Game Theory and Nash Equilibrium

At the heart of Game Theory is the
Nash Equilibrium, a concept where no player can improve their outcome by unilaterally changing their strategy if others maintain theirs. In simpler terms, it’s a stable state where everyone makes the best decisions possible given the choices of others. However, in traditional economic systems, Nash Equilibria often leads to outcomes that favor competition over cooperation, with the primary focus on profit maximization rather than sustainability. This competitive focus fuels an imbalance in resource allocation, often disregarding the long-term needs of communities and ecosystems.

A large storm cloud is moving over a green field.

Shifting from Profit-Driven Choices to Survival-Driven Decisions
One of the key lessons Game Theory offers for sustainability is the idea of equilibrium, where multiple players cooperate to achieve shared benefits. Applying this principle to economic systems means moving from profit-driven choices to survival-focused strategies. In a profit-focused system, businesses, individuals, and nations often act in ways that ensure their own short-term gains, leading to overconsumption, resource depletion, and environmental degradation. In contrast, a survival-focused approach, such as
physical economics, prioritizes the long-term viability of essential resources, fostering resilience and adaptability.


The concept of cooperative strategies within Game Theory suggests that players who share resources and support each other’s survival can achieve better outcomes in the long run. For example, when industries within an economy collaborate to share sustainable practices or exchange resources, they create a resilient system where all parties benefit. This approach challenges traditional zero-sum thinking and promotes positive-sum outcomes where each participant contributes to a stable, healthy environment that supports everyone’s long-term well-being.

Two people on a boat one of whom is wearing a vest that says wild cats

Embracing Diverse Resources and Economic Choices for Resilience
One principle within Game Theory that applies well to sustainable economies is the emphasis on diverse strategies. In nature, diversity ensures resilience; ecosystems thrive when there is a balance among various species, each contributing uniquely to the whole. Similarly, in sustainable economics, diversity in resources, energy sources, and methods of meeting basic needs helps buffer societies against shocks, such as economic downturns or resource shortages.


Incorporating diversity into economic systems can prevent vulnerabilities that arise from monocultures or single-resource dependence. For instance, economies that rely on a single crop or fuel source are more susceptible to crises if that resource becomes scarce or if environmental conditions shift. By diversifying our resources—such as embracing renewable energy sources alongside traditional ones—we reduce dependency and increase the adaptability of our economy.

A factory with smoke coming out of the chimneys at sunset.

Cooperative Strategies to Combat Resource Scarcity and Climate Challenges
A common Game Theory model is the “
Prisoner’s Dilemma,” where two players must decide between cooperation and self-interest. When applied to sustainability, this model highlights the tragedy of the commons, where individuals acting in their self-interest deplete shared resources to everyone’s detriment. Addressing climate change and resource scarcity requires us to adopt cooperative strategies, ensuring that all stakeholders work together to protect common resources.


For instance, by applying a cooperative approach to fisheries or forest conservation, industries and governments can jointly regulate resource usage. This cooperative strategy aligns with the HREM (Human Renewable Energy Measure) model developed by Jeff Beller and Susan Caumont, which emphasizes calculating economic value based on sustainable human needs. HREM promotes a unified measurement that values resources in terms of human energy and ecological impact, encouraging stakeholders to view resources as vital to collective survival rather than individual profit.

The sun is shining through the trees in the forest.

Toward a New Economic Equilibrium: Sustainable Growth Through HREM
The HREM model embodies many Game Theory concepts by advocating for an economy rooted in shared survival rather than unrestrained competition. This model presents an alternative form of equilibrium—one where sustainability is the foundation, and resources are allocated to support basic human needs and environmental health.


Through HREM, we can design an economic system that allocates energy resources based on sustainable living rather than excess. By measuring economic value in terms of human energy and ecological sustainability, HREM allows us to see the true costs of consumption and encourages decision-making that supports everyone’s survival. This shift creates an economy where cooperation replaces competition, and survival becomes a shared goal.


Building a Balanced Future with Game Theory

Game Theory and the HREM model inspire a new approach to economics, one where diverse strategies, shared resources, and cooperative action take precedence. When applied to sustainability, Game Theory reminds us that individual choices impact the collective and that cooperation is essential for achieving long-term stability.


By aligning economic systems with these principles, we can build a world where growth and sustainability coexist—an equilibrium that prioritizes resilience, human well-being, and environmental health.

A man is sitting at a table looking at a laptop computer.
A group of people are putting their hands together.
A group of people wearing masks are planting trees in the dirt.
A woman is drawing a graph on a glass wall with a marker.
A large iceberg is floating on top of a body of water.
July 21, 2025
Seattle, Victoria & Vancouver Seattle, Washington US, June 25, 2025
July 14, 2025
The United States, chapter 8 San Diego, June,17 - San Francisco, June, 22
July 7, 2025
Hawaii, 6/1/25. CAW, ch 7 Part 2
June 30, 2025
Hawaii, 6/1/25. Part 1
June 29, 2025
The Parallel Currency, June, 2025
June 23, 2025
The right to not starve, the right to have shelter, the right to be treated for curable illness, the right to not be ignorant. Humanity, over many years of civilization, has created solutions for all these and can provide them, Worldwide. Freedom of speech and freedom of religion (which is essentially freedom of speech) are not enough. To make the “pursuit of happiness” a real possibility a person must have the other four human rights, food, shelter, healthcare and education. It does not take a “rocket scientist” to figure out how to pay for and distribute these rights. We can use our representation for value, money, any way we wish. The way money flows now is the classic pattern that we all are born into and must use. Basically it is capitalism. The market is moved by profit. Only peripherally does preservation of humanity or limited natural resources come into view. Normally there has to be an emergency for this to happen; a war, weather disasters or a pandemic. When the workforce is reduced or resources made scarce. This is not a sustainable situation. It can last for a long time, as it has, but it is always in the slow process of destroying itself. Like the nightmare cliff dropping away behind you as you run. We have the solution in our hands: a Parallel Currency. It will not make everyone honest, kind or generous. But it will keep people from starvation, illness, ignorance and homelessness. Humanity will no longer be enslaved by the more destructive side effects of capitalism. A Parallel Currency is used just for the four basic needs. It is available to everyone from birth until death. When the Parallel Currency arrives at banks it is destroyed so it cannot behave like regular currency and be invested or saved; which can cause inflation. Parallel Currency is only used to provide education, food, shelter and medical care, it is a closed loop. Other currencies will continue to function as usual. Individuals can make as much money as they wish for whatever they wish. The difference is that they will not be depriving other people of their ability to survive. We have the communication, organizing and distribution tool already; the Internet. Locating, assembling, and distributing all the parts necessary for this objective is possible with our information technology. With the development of AI organizIng the Parallel Currency is even more easily done. We will start by paying for these rights but as time passes it will become obvious that this is advantageous to everyone and to our planet's health and like freedom of speech, we won't have to pay for it anymore, with money or blood. Susan Caumont June, 2025
June 2, 2025
Mexico, 5/5/25.
May 27, 2025
“It is soulless, exploitive, inequitable, unstable and destructive, yet also all- conquering and overwhelming.” Capitalism and its Critics: A History from the Industrial Revolution to AI By John Cassidy This is one of the best descriptions of Capitalism I have read recently. The only thing it leaves out is that Capitalism regularly destroys itself and has to be rescued with huge infusions of human labor (money). But Capitalism is so appealing to humans that it is allowed to continually transform and conform to new demands and circumstances, even though it is inherently unstable and destructive. Like the charming self destructive uncle who is so entertaining with his stories and wild money making schemes, no one wants him to stop. It is so much fun! For a few people. And all it takes is a few people to keep Capitalism going, approximately ten percent of the World population, the richest ten percent. That Capitalism has lasted and spread is testimony to its ability to keep adapting and improving on its main strengths: soullessness and exploitation. As a species we have become, over approximately 500 years, completely adapted to Capitalism. No matter what it distorts, destroys or lays waste to, it has captured our imaginations like a religion. We won't be saying goodbye to it anytime soon. But there is an antidote. We can make up for some of its most destructive symptoms with a Parallel Currency that is used only for basic human needs, food, shelter, education and healthcare, Worldwide. Some countries are already trying to do this with their tax structures and laws but a Parallel Currency would do this without taxation or inflation. It is a separate currency that can only be used to provide basic needs and is destroyed when it reaches a bank; it will not create inflation. It also will not inhibit the positive capabilities of existing currencies. They will continue to function as they usually do. The Parallel Currency is a closed loop created for the dignified survival of humanity. Freedom of speech, freedom of religion are not enough. A government by the people and for the people must also guarantee freedom from starvation, ignorance and curable illness, all things as a human species, over thousands of years, we have developed remedies.
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