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Implication of game theory to international trade

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  • Dobre I. Claudia

    („Ovidius” University of Constanta Faculty of Economic Science Constanta, Romania)

Abstract

Game Theory is a general mathematical analysis to investigate the strategic interactions among players. Game theorists attempt to provide precise descriptions of situations of conflicting interests in order to study the behavior that such a conflict would (or, in some cases, should) elicit from rational agents. Players are assumed to consider the position and perceptions of other players while forming their strategies. In our examples, we will assume that there are two players, and that each has two choices and the fact that the players are selfish (operate in their own best interests) and rational (choose the best options available). First, I outline some basic concepts of game theory and, in the next section, I give some examples regarding the application of game theory to international trade (cartel, free trade & protection and trade policies).

Suggested Citation

  • Dobre I. Claudia, 2008. "Implication of game theory to international trade," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(10), pages 132-137, April.
    • Handle: RePEc:aio:rteyej:v:1:y:2008:i:10:p:132-137
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    References listed on IDEAS

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    1. Jonathan Eaton & Gene M. Grossman, 1986. "Optimal Trade and Industrial Policy Under Oligopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(2), pages 383-406.
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    Cited by:

    1. Beatriz Pereira & Sílvia Ferreira Jorge & Celeste Amorim Varum & Micaela Pinho, 2022. "Product Differentiation And Export Incentive Schemes: A Game Theory Approach," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(234), pages 55-80, July – Se.

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    More about this item

    Keywords

    Game Theory; cartel; trade policies;
    All these keywords.

    JEL classification:

    • C00 - Mathematical and Quantitative Methods - - General - - - General
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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