Game Theory in PRC-Philippines Relations
Through the past few decades, there has been a heavy dispute between the People’s Republic of China and the Philippines over territorial claims in the South China Sea. Currently, the PRC has laid claim to a significant portion of the South China Sea which has created tensions with other countries in Southeast Asia. In 2016, an international court ruled against PRC claims under the United Nations Convention on the Law of the Sea. However, the PRC has refused to recognize this ruling and continues to acknowledge their ownership to much of the South China Sea.
In a new development earlier this month, the PRC has extended an offer to the Philippines for joint oil and gas exploration in the South China Sea. Through this deal, the PRC offers 60 percent of any discovered resources to the Philippines. In exchange for the majority share of resources, the PRC wants the Philippines to acknowledge the PRC’s claims as legitimate. In this current situation, we can see that game theory is extremely relevant here.
The relations between the PRC and the Philippines has a lot of similarities to the Hawk-Dove Game. Both sides want to draw from the same pool of resources, and both have a goal of seeing their own country have the most success. In the case that both countries cooperate, they will have nearly equal resources to work with. If one country is aggressive and the other cooperates, the aggressive party gets all of the resources. The cooperative party will end up with no resources in this situation. If both parties play aggressively, each side is left with only a few resources. Since neither side wants to be exploited and leave with zero resources, it would be optimal to play aggressively in order to get some payout.
However, this current setup doesn’t account for the long-term pitfalls. In the case that both sides are aggressive, there will be a small number of resources to work with at first. With both sides challenging each other, the situation can end up into an all-out war between both sides. This case would end up leaving both parties with a loss and would be a bad strategy to play. So it would make sense why it may be in both countries best interest to cooperate in order to see long-term success.
Source:
https://www.cnn.com/2019/09/12/asia/duterte-xi-south-china-sea-deal-intl-hnk/index.html