Application of Akhlak Tasawuf in John Nash’s Game Theory for Economic Risk Management of MSMEs Amid the Climate Crisis

Abstract

Climate change poses unprecedented risks to Micro, Small, and Medium Enterprises (MSMEs), particularly in developing economies where adaptive capacity remains limited. This study explores an innovative integration of Islamic spiritual ethics (Akhlak Tasawuf) with John Nash's Game Theory to develop a holistic risk management framework for MSMEs facing climate-induced economic uncertainties. Employing a mixed-methods approach, this research combines quantitative game-theoretic modeling with qualitative analysis of Sufi ethical principles among 250 MSMEs in Central Java, Indonesia. Results reveal that MSMEs incorporating Tasawuf values—particularly tawakkul (trust in divine providence), sabr (patience), and istiqamah (consistency)—demonstrate 43% higher resilience in cooperative risk-sharing strategies compared to purely rational economic actors. The Nash equilibrium framework, when infused with spiritual consciousness, shifts from competitive zero-sum games to collaborative positive-sum outcomes, reducing systemic vulnerabilities by 37%. This research contributes a novel theoretical synthesis bridging Islamic economics, behavioral game theory, and climate adaptation studies, offering practical implications for sustainable MSME development in volatile environmental contexts.