Alliances and the High Politics of International Trade

2015 ◽  
Vol 5 (4) ◽  
pp. 587-611
Author(s):  
Scott Wolford ◽  
Moonhawk Kim
Keyword(s):  
Theoretic Model ◽  
Trade Barriers ◽  
Security Cooperation ◽  
Data Set ◽  
Dyadic Data ◽  
Military Alliances ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Relationship

What is the role of trade policy in military alliances? We analyze and test a game-theoretic model of economic and security cooperation in which allies hold different interests across the security and commercial aspects of the relationship. In equilibrium, allies with little market power who are valuable politically to larger states engage in sociallysuboptimal protectionism, as their allies’ threats of retaliation are incredible. Stable cooperation emerges in the form of unretaliated protection rather than mutually low trade barriers. We test the model’s implications against a dyadic data set of antidumping petitions from 1980 to 2013 and find that larger allies are more likely to tolerate protectionism by smaller allies by denying domestic petitions to retaliate against dumping measures by the latter.

Expecting the Unexpected: Disaster Risks and Conflict

2020 ◽  
pp. 106591292091120
Author(s):  
Muhammet A. Bas ◽  
Elena V. McLean
Keyword(s):  
Rational Expectations ◽  
Simple Game ◽  
Interstate Conflict ◽  
Theoretic Model ◽  
Commitment Problem ◽  
Future Events ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Relationship ◽  
Commitment Problems

This study examines the relationship between disaster risks and interstate conflict. We argue that in disaster-prone areas actors’ rational expectations about the likelihood and magnitude of potential future disasters can make conflict more likely. The relationship emerges when future disasters are viewed as shocks that are expected to shift the relative power balance among states. If large enough, such expected shifts can generate commitment problems and cause conflict even before any disasters take place. Our approach represents a shift of focus from previous research, which investigates the effect of actual disasters and ignores rational expectations regarding future events. We use a simple game-theoretic model to highlight the commitment problem caused by disaster risks. We then discuss and apply an empirical strategy enabling us to disentangle effects of disaster proneness from effects of actual disaster events. Our results indicate that greater disaster risks are indeed associated with a higher likelihood of interstate conflict.

A Formal Game-Theoretic Model for Rational Exchange Protocol

2011 ◽  
Vol 204-210 ◽  
pp. 2033-2040
Author(s):  
Xiu Ting Tao ◽  
Yong Gen Gu ◽  
Guo Qiang Li
Keyword(s):  
Subgame Perfect Equilibrium ◽  
Theoretic Model ◽  
Formal Definition ◽  
Perfect Equilibrium ◽  
Game Tree ◽  
Extensive Game ◽  
Formal Framework ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Relationship

A rational exchange protocol is a useful protocol in which two (or more) strange parties exchange their items successfully in a way that every rational party has enough reasons to follow the protocol faithfully rather than deviate from it. This means neither parties of the protocol can gain an advantage by deviating from the protocol, but he may bring a disadvantage to the other party even if who is correctly behaving party. We introduce game theory as a formal framework in this paper. We give a formal definition for the rational exchange related to the concept of the subgame perfect equilibrium of an extensive game. We use our model to analyze the Syverson protocol by the game tree and show the relationship with Buttyan's Model.

When Are Sanctions Effective? A Bargaining and Enforcement Framework

2014 ◽  
Vol 69 (1) ◽  
pp. 131-162 ◽  
Author(s):  
Navin A. Bapat ◽  
Bo Ram Kwon
Keyword(s):  
Economic Sanctions ◽  
Theoretic Model ◽  
Data Set ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
Empirical Implications ◽  
Foreign Competitors

AbstractAlthough a considerable literature identifies the conditions under which sanctions are more likely to be successful, few studies examine the question of when sanctioning states or senders are willing to enforce their sanctions laws against their firms. Using a game theoretic model, we argue that imposing sanctions creates a strategic dilemma for senders. We demonstrate that senders often have disincentives to enforce their sanctions policies, given that the restriction on economic transactions with targeted states may undermine their firms' competitiveness. The model indicates that sanctions are more likely to succeed when the sender's firm retains a moderate share of the target's market relative to its foreign competitors. However, the model also demonstrates that sanctions are likely to be imposed only when the conditions do not favor their success. The empirical implications of the model are tested using the Threat and Imposition of Economic Sanctions (TIES) data set.

Is There a Trade-off between Security and Liberty? Executive Bias, Privacy Protections, and Terrorism Prevention

2011 ◽  
Vol 105 (1) ◽  
pp. 64-78 ◽  
Author(s):  
TIBERIU DRAGU
Keyword(s):  
Policy Making ◽  
Terrorist Attack ◽  
Civil Liberties ◽  
Theoretic Model ◽  
Strategic Interactions ◽  
Privacy And Security ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Relationship ◽  
Terrorism Prevention

I develop a game-theoretic model of an interaction between an antiterrorist agency and a terrorist organization to analyze how the probability of a terrorist attack varies when the level of privacy protections changes. I derive two implications. First, privacy and security from terrorism need not be in conflict: when accounting for strategic interactions, reducing privacy protections does not necessarily increase security from terrorism. Second, and more important, the antiterrorist agency will always want less privacy. The very agency whose expertise affords it disproportionate influence on policy making will prefer a reduction in privacy protections even when that reduction harms security from terrorism. The analysis has implications for understanding the relationship between government powers and civil liberties in the context of terrorism prevention and times of emergencies more generally.

Globalization and Capital Taxation in Consensus and Majoritarian Democracies

2003 ◽  
Vol 56 (1) ◽  
pp. 79-113 ◽  
Author(s):  
Jude C. Hays
Keyword(s):  
Political Institutions ◽  
Domestic Politics ◽  
Economic Globalization ◽  
Theoretic Model ◽  
Capital Taxation ◽  
Qualitative Evidence ◽  
Capital Tax ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Relationship

This article contributes to the growing literature on the role that domestic political institutions play in mediating globalization pressures by arguing that the capital tax constraints arising from international economic integration are the most severe for countries with majoritarian political institutions. In doing so, the author solves a tax puzzle that challenges conventional thinking about how institutions condition the relationship between economic globalization and domestic politics. He presents a formal, game-theoretic model to sharpen the basic logic of his argument and then tests some of the model's predictions empirically using both quantitative and qualitative evidence.

Transaction Utility and Quality Choice

2017 ◽  
Vol 15 (1) ◽  
pp. 1-17 ◽  
Author(s):  
Sajeesh Sajeesh ◽  
Sang-Young Song
Keyword(s):  
Price Competition ◽  
Theoretic Model ◽  
Consumer Decision Making ◽  
Firm Strategies ◽  
Pricing Decisions ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
Quality Choice ◽  
The Impact

AbstractThis paper uses a game-theoretic model to examine the role of reference price for firms that vary in their quality positioning in competing for customers. Reference prices provide consumers with additional components of utility. Building on previous research on the impact of consumer decision making on firm strategies, we focus on how firms choose their positioning when consumer utility is driven not only by acquisition utility but also by the transaction utility associated with the purchase and how this, in turn, affects firms’ pricing decisions and profits. Considering a competition between two firms, this paper shows that the firm with higher product quality provides greater discounts to consumers. We also show that when firms are allowed to set a high ‘regular’ price, product differentiation is greater between the firms, and price competition is less intense. Furthermore, under some conditions, the profits of both firms can be higher than the benchmark case (when the effects of transaction utility are ignored).

scholarly journals The Effect of Green Technology Adoption Strategy on Duopoly Competition

2021 ◽  
Vol 9 (5) ◽  
pp. 498-518
Author(s):  
Chenglin Shen ◽  
Xinxin Zhang
Keyword(s):  
Green Technology ◽  
Social Planner ◽  
Theoretic Model ◽  
Green Product ◽  
Trade Offs ◽  
Environmental Attributes ◽  
The Social ◽  
Game Theoretic ◽  
Game Theoretic Model

Abstract Given consumers’ trade-offs between conventional economic and environmental attributes of products, we provide a game-theoretic model to explore the role of GTA strategy in duopoly competition by incorporating two salient features: Two product types — The green product produced by a firm with GTA strategy and the ordinary product produced by a firm without GTA strategy, and two consumer segments, i.e., the green consumers who are willing to pay for green products and the ordinary consumers who are willing to pay for ordinary products. Our analysis shows that GTA strategy may either increase or decrease the green firm’s quality provision. The subtle relationship between the green firm’s quality strategy and GTA strategy not only affects its own equilibrium performances but its rival’s. We also find that two consumer segments may be better off in the presence of a lower GTA intensity. Additionally, although the GTA strategy benefits the environment, the GTA investment is not the more the better. Finally, we find that GTA strategy would lead to higher social welfare only when the GTA efficiency is high enough. Our work not only provides an alternative economic explanation why some firms choose to implement GTA strategy and some do not in reality, but gives managerial insights for firms with different GTA strategies as well as policy insights for the social planner.

On repression and its effectiveness

2017 ◽  
Vol 29 (4) ◽  
pp. 599-622 ◽  
Author(s):  
Tiberiu Dragu
Keyword(s):  
Terrorist Attack ◽  
Policy Implications ◽  
Security Policies ◽  
Theoretic Model ◽  
Terrorist Threat ◽  
Electoral Incentives ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
Democratic Societies ◽  
The Relationship

Do electoral incentives to stop a terrorist attack before the next election induce democratic governments to undertake ineffective counterterrorism policies? This article shows that shortsighted electoral motivations are not a sufficient explanation for why governments engage in counterproductive repression when responding to electoral pressures to safeguard security. It develops a game-theoretic model to show that limitations on observability of counterterrorism activities are an important factor for understanding why electoral pressures might induce democratic governments to choose ineffective security policies. The model also allows us to systematically investigate the conditions under which repressive counterterrorism is more likely to aggravate the terrorist threat, and has empirical and policy implications regarding the relationship between repression and its (in)effectiveness when democratic societies strive to counter the threat of terrorism.

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