A Game Theory perspective on Public Institutions - the case of Romanian Education System


  • Marcel Cremene Adaptive Systems Laboratory Technical University of Cluj-Napoca


education, reform, Game Theory, Behavioral Economics, policy makers


Institutional reforms frequently fail because they are based on unrealistic hypotheses leading to limited models. A narrow mechanical vision focused only on hierarchy and roles may not be adequate when trying to understand how institutions work in the context of human society. Such a vision does not take into account human nature. We propose a model based on Game Theory and Behavioral Economics. Our model complements the centralized hierarchical vision about a public institution by adding a new dimension regarding the strategic interactions between agents/players. The case of Romanian Education System is considered as application domain. Three simple games describing common situations that appear inside this system are analyzed. Nash equilibria detected in these games indicate stable states of the system, states from which no player has any incentive to unilaterally deviate. The results help to explain why some reforms are so difficult to implement. Policy makers and institutional managers may find the proposed model useful in making public institutions more efficient.


J. von Neumann, ―The general and logical theory of automata,‖ in Cerebral Mechanisms in Behaviour, L. A. Jeffress, Ed. Wiley, 1951, pp. 2070–2099.

R. M. Dawes, ―Social dilemmas,‖ Annual Review of Psychology, vol. 31, no. 1, pp. 169–193, 1980.

K. Binmore, Game theory and the social contract, ser. MIT Press series on economic learning and social evolution. MIT Press, 1998.

R. M. Dawes, Social dilemmas, economic self-interest and evolutionary theory. New York: Springer, 1991, pp. 53–79.

D. Rankin, K. Bargum, and H. Kokko, ―The tragedy of the commons in evolutionary biology,‖ Trends in Ecology & Evolution, vol. 22, no. 12, pp. 643–651, Dec. 2007.

F. C. Santos, M. D. Santos, and J. M. Pacheco, ―Social diversity promotes the emergence of cooperation in public goods games,‖ Nature, vol. 454, no. 7201, pp. 213–216, 2008.

D. G. Rand, A. Dreber, T. Ellingsen, D. Fudenberg, and M. A. Nowak, ―Positive interactions promote public cooperation,‖ Science, vol. 325, no. 5945, pp. 1272–1275, 2009.

M. A. Nowak, ―Evolving cooperation,‖ Journal of Theoretical Biology, vol. 299, no. 0, pp. 1 – 8, 2012.

G. Gigerenzer and R. Selten, Bounded Rationality: The adaptive toolbox. Cambridge: The MIT Press, 2001.

E. Fehr and S. Gachter, ―Altruistic punishment in humans,‖ Nature, vol. 415, no. 6868, pp. 137–140, Jan. 2002.

R. Fisher, The genetical theory of natural selection. The Clarendon Press, 1930. [Online]. Available: http://books.google.ro/books?id=t3jwAAAAMAAJ

W. B. Group, World Development Report 2015: Mind, Society, and Behavior. The World Bank, 2015. [Online]. Available: http://EconPapers.repec.org/RePEc:wbk:wbpubs:20597

D. Kahneman, Thinking, fast and slow. New York: Farrar, Straus and Giroux, 2011.

J. Persky, ―Retrospectives: The Ethology of Homo Economicus,‖ The Journal of Economic Perspectives, vol. 9, no. 2, pp. 221–231, 1995. [Online]. Available: http://dx.doi.org/10.2307/2138175

A. Rapoport and A. M. Chammah, ―The Game of Chicken,‖ American Behavioral Scientist, vol. 10, no. 3, pp. 10–28, Nov. 1966. [Online]. Available: http://dx.doi.org/10.1177/000276426601000303