Review of Game Theory Applications in International Trade
https://ijels.com/upload_document/issue_files/26IJELS-101202247-Reviewof.pdf
This paper, published in January 2022, reviewed game theory models common in the area of international trade such as trade wars. It also discussed game theory models being applied in the recent U.S. -China trade war.
This paper is relevant to course material since we’ve also been talking about game theory in the class. This paper gives real-world examples that utilize the terms we’ve been studying in lecture. For example, consider a game where the players are countries and strategies are choices of tariffs. Between Australia and China, both countries would use game theory to help themselves make the best policy decisions. The author provided a payoff matrix when Australia and China fight a trade war, and used Nash Equilibrium to explain potential outcomes.
This paper is not only relevant to the course material, but also relevant to our daily lives. For example, this article reviewed the game theory models being used in analyzing the U.S. – China trade war, which is still going on. The trade war between large countries not only hurt their own economy, but also hurt global economy as well as emerging industries. The inflation in the U.S. in the past few years reflects this damage and this article is really useful in getting to know what’s going on using the knowledge that we learned in class.