Game Theory, The Nobel Prize and Social Software

First, congratulations to Nobel for seeing the importance of game theory in economics.  It DOES matter how people interact.  Even more so going forward given the new level of transparency provided by the Internet.  From the NYT article American and Israeli Share Nobel Prize in Economics by LOUIS UCHITELLE October 11, 2005:

The Nobel judges said that the work of Mr. Schelling and Mr. Aumann "was essential in developing noncooperative game theory further and bringing it to bear on major questions in the social sciences."

Game theory departs from mainstream economics, which assumes that people behave rationally and act independently of one another. Game theorists assume that in a given situation people are affected by what other people do or what they imagine others will do, particularly when their goals are conflicting.

Emphasis added by me.  The article goes on to talk about the novel "Red Alert" and how a doomsday device is NOT a deterrent if the other side doesn’t know you have it.

So all of this has me thinking about "Flame as performance art" (Shirky) and has me wondering about the overlap between game theory and social software.  Would negotiations with North Korea be different if we did not know their capabilities?  If their population had a voice to increase transparency?  The Iraq conflict continues to be discussed as far as who knew what when. Whether for or against it is safe to say that a game theory analysis of the conflict would be interesting.  I have no answers this AM, just questions.