Application of the Iterated Prisoner's Dilemma and Evolutionary Game Theory in Siting Nuclear Power Plants in South Korea

Abstract

The quality of an urban living environment largely depends on the planning and development of public facilities, which are often halted or delayed due to the NIMBY (not in my backyard) phenomenon. In such facilities, environmental costs are borne solely by the residents of proximity to the facility, while public goods/services produced by the facility are reaped equally by residents across the greater region, which in turn presents a complex dynamic of public and self-interest. This paper uses repeated games and evolutionary game theory to identify the optimal negotiation strategy for the government when siting nuclear power plant facilities in South Korea. This study simulated a tournament containing 36 selected iterated prisoner's dilemma strategies and considered factors including mean payoff values, payoff matrices, and Axelrod's Ecological Variant to deduce an optimal strategy. The results showed that AON2, a memory-2 strategy of direct reciprocity, would provide the most stable and high return negotiations.