WORLD TRADE AND NATIONAL CONFLICT: A STRATEGIC APPROACH TO TRADE POLICY FROM GAME THEORY
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- Articles
- Submitted: July 11, 2023
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Published: April 22, 2024
Abstract
Trade openness has been an instrument of development of countries. The objective of the research is to show, first, that trade openness generates, in the long term, distributive effects that induce internal conflicts in the countries. Secondly, economies of scale and increases in productivity lead to conflicts between countries due to the war that is generated when trying to maintain or gain participation in international markets. The results are obtained from the Stolper-Samuelson theorems for internal effects and participation functions to visualize conflicts between countries. Third, the Nash equilibria that result from modeling various trade policy schemes in a strategic approach are structured and analyzed. Finally, it is concluded that countries can improve the results from international trade if they apply strategic trade policy schemes that consider the possible actions of their opponents under a game theory scheme.
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