| Abstract | This study utilizes game theory to illustrate why nations allow sweatshops to operate within their borders, and why consumers continue to purchase the goods that originate there. Through analysis of payoffs, including reputational and economic costs and benefits, predictions may be made concerning the continuing case of Foxconn. Additionally, this study examines the cases of Nike in Indonesia and Kathie Lee Gifford's Wal-Mart line production in Honduras to determine historical fulfillment of the game theory model. The result indicates that economic factors are the most naturally influential, though they may evolve to be prioritized below either a strong legal system or consumer attitudes. This evolution is conditional upon a variety of scenario-specific factors, and does not occur in all cases. Thus, we find the solution in one case is not consistently applicable in all instances of a sweatshop's existence. Two simultaneous-move games are used in solving this puzzle. |
