Modeling the US-China trade conflict: a utility theory approach
This paper models the US-China trade conflict and attempts to analyze the (optimal) strategic choices. In contrast to the existing literature on the topic, we employ the expected utility theory and examine the conflict mathematically. In both perfect information and incomplete information games, we show that expected net gains diminish as the utility of winning increases because of the costs incurred during the struggle. We find that the best response function exists for China but not for the US during the conflict. We argue that the less the US coerces China to change its existing trade practices, the higher the US expected net gains. China's best choice is to maintain the status quo, and any further aggression in its policy and behavior will aggravate the situation.
Code (0)
등록된 구현이 없습니다.
Similar Papers 제목 키워드 기반
A Proposal to Extend Expected Utility in a Quantum Probabilistic Framework
Expected utility theory (EUT) is widely used in economic theory. However, its subjective probability formulation, first elaborated by Savage, is linked to Ellsberg-like paradoxes and ambiguity aversion. This has led vari…
Decision MakingDecision Making Under UncertaintySafety-Utility Conflicts Are Not Global: Surgical Alignment via Head-Level Diagnosis
Safety alignment in Large Language Models (LLMs) inherently presents a multi-objective optimization conflict, often accompanied by an unintended degradation of general capabilities. Existing mitigation strategies typical…
Analyzing a Complex Game for the South China Sea Fishing Dispute using Response Surface Methodologies
The South China Sea (SCS) is one of the most economically valuable resources on the planet, and as such has become a source of territorial disputes between its bordering nations. Among other things, states compete to har…
Inside you are many wolves: Using cognitive models to interpret value trade-offs in LLMs
Navigating everyday social situations often requires juggling conflicting goals, such as conveying a harsh truth, maintaining trust, all while still being mindful of another person's feelings. These value trade-offs are …
Mathematical ReasoningSector connectedness in the Chinese stock markets
Uncovering the risk transmitting path within economic sectors in China is crucial for understanding the stability of the Chinese economic system, especially under the current situation of the China-US trade conflicts. In…