Abstract
This article reexamines economic development research and policy-making by focusing on strategic behavior as an important component of the process. Ironically, despite early recognition that game theory elements were present in the economic development decision context, little formal work has extended these insights. Oddly, this lack of a formal literature has not prevented game theory jargon from permeating the common lexicon of analysts commenting on economic development policies. This article reviews the small but emerging game theoretic literature as it applies to economic development policy. Game theory is shown to be a powerful new tool for analyzing such economic development policies as competitive subsidization and urban renewal. The article suggests a number of policy and research strategies derived from the game theoretic approach.
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