A Critical Examination of the Moral Foundations of Game Theory in Islamic and Conventional Economics

Articles in Press

Author

Department of Islamic Economics, Faculty of Economics, Allameh Tabatabaei University

10.30471/iee.2025.11265.2538

Abstract

Abstract

Game theory, as a mathematical framework for analyzing strategic interactions, rests in conventional economics on four ethical foundations: utilitarianism, egoism, ethical consequentialism, and secular justice. These principles emphasize instrumental rationality, the maximization of individual gain, and the evaluation of outcomes in material terms, while relegating cooperation and justice to a secondary position. Nevertheless, both theoretical and empirical critiques have revealed fundamental shortcomings of game theory in explaining complex human behavior, accounting for moral and social dimensions, and providing effective guidance for policy design.

From the standpoint of Islamic economics, these foundations suffer from profound ethical deficiencies. Utilitarianism reduces utility to material benefit and neglects moral intent. Egoism contradicts the Islamic conception of the human being as a morally responsible and hereafter-oriented agent. Islamic deontology requires not only attention to outcomes but also the legitimacy of means and the purity of intention. Justice, moreover, must be regarded as a normative and institutional constraint, rather than a mere component of individual utility.

This study therefore proposes an alternative framework termed Islamic Interaction Theory (or Cooperation Theory). In this model, the utility function incorporates moral and eschatological variables, rules derive from Sharia and social justice, and cooperation is framed as a religious duty. Such a framework can align equilibrium outcomes with Islamic moral and social objectives, while also fostering efficiency and ethical sustainability in non-Muslim contexts.

Keywords

Journal of Economic Essays: an Islamic Approach

Articles in Press, Accepted Manuscript
Available Online from 13 October 2025

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