GLOBAL TRADE AND NATIONAL CONFLICT: A STRATEGIC APPROACH TO TRADE POLICY BASED ON GAME THEORY

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Published: 2024-04-22
DOI: https://doi.org/10.22395/seec.v27n62a4525
Keywords:
trade liberalization, distributive effects, strategic trade policy, Nash equilibria

Main Article Content

José Contreras
Universidad Metropolitana de Caracas.

Abstract

Trade liberalization has been a tool for country development. This research aimed to show, firstly, that trade liberalization generates, in the long run, distributive effects inducing internal conflicts within countries. Secondly, economies of scale and productivity increases lead to conflicts between countries due to the competition generated by attempts to maintain or gain market share in international markets. The results are derived from the Stolper-Samuelson theorems for internal effects and participation functions to visualize conflicts between countries. Thirdly, Nash equilibria resulting from modeling various trade policy schemes following a strategic approach are structured and analyzed. Finally, it is concluded that countries can improve outcomes from international trade if they apply strategic trade policy schemes that make room for potential actions of their opponents within a game theory framework.

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Article Details

Issue

Vol. 27 No. 62 (2024): Enero-Junio

Section

Articles
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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

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Author Biography

José Contreras, Universidad Metropolitana de Caracas.

PhD. en Economía de la Universidad de Texas A & M. USA. Magíster de la Universidad Central de Venezuela (ucv) y matemático de la ucv. Profesor de la Universidad Metropolitana de Caracas. comunicaciones@unimet.edu.ve. Zip 1073. Correo electrónico: jcontreras@unimet.edu.ve. https://orcid.org/0000-0001-7015-746.

How to Cite

Contreras, J. (2024). GLOBAL TRADE AND NATIONAL CONFLICT: A STRATEGIC APPROACH TO TRADE POLICY BASED ON GAME THEORY. Semestre Económico, 27(62), 1-36. https://doi.org/10.22395/seec.v27n62a4525

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