Contemporary economic theory, while successful in explaining markets, incentives, and decision-making under rational expectations, has proven insufficient to account for the growing relational complexity and adaptive uncertainty that characterize modern economic environments. Trust collapses, long-term cooperation breakdowns, venture capital misalignments, and geopolitical trade tensions all demonstrate that utility maximization under fixed rules fails to capture the deeper dynamics at play.
In particular, recent economic phenomena reveal a critical blind spot:
Why do actors cooperate irrationally at a short-term loss?
Why do betrayals echo far longer than their measurable economic cost?
Why does ambiguity in signaling often become a strategic currency?
These are not anomalies, but consistent patterns in real-world economic behavior, pointing to a relational substrate underlying market transactions. We argue that economic interactions are not static exchanges, but evolving, memory-laden, emotionally-charged movements between dynamically reclassified zones of trust, caution, aggression, and forgiveness.
This paper proposes a novel framework---Relational Zone Economics (RZE)---which expands traditional economics by integrating:
Dynamic positioning (zone theory),
Adaptive memory functions,
Strategic ambiguity as economic signaling, and
Interest modeling across multiple time horizons.
Such an expansion is not only timely but necessary, particularly in the context of:
Complex stakeholder systems (e.g., multi-party agreements),
Post-pandemic recovery frameworks, and
AI-mediated economic interactions, where trust and relational memory may evolve faster than institutional norms can follow.
This theoretical leap is meant not to discard traditional models, but to enrich them, forming a layered economic logic capable of addressing both the visible mechanics of payoff and the invisible infrastructure of relational positioning.
B. Objectives of Relational Zone Economics (RZE)
The Relational Zone Economics (RZE) framework is conceived as a paradigm shift in how we model economic behavior---not as isolated rational decisions, but as sequential, memory-sensitive, and context-dependent relational movements.
The objectives of RZE are fourfold:
1. To Formalize Ambiguity as a Strategic Economic Resource
Unlike classical models that view uncertainty as an exogenous disturbance or noise to be minimized, RZE recognizes strategic ambiguity as an intentional asset used by economic agents to buy time, protect long-term interests, or test trust boundaries. Our model offers a formal representation of ambiguity via relational zones and transition probabilities, enabling clearer analysis of how actors manage unknowns.
