As the individual economies of the European Union member countries become increasingly integrated, sharing factors of production such as capital, labour, and technology, international trade is expected to continue to increase. For the purpose of this paper, I have chosen to analyse the international trade under the perspective of Aggressive Bargaining. The result will be that Aggressive Bargaining leads to a sub-optimal outcome.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Game Theory
- International trade
- Mercantilism
- Smith and Ricardo
- Aggressive Bargaining
- Solutions
- Sources
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper examines the impact of aggressive bargaining on international trade within the framework of game theory. The goal is to demonstrate that aggressive bargaining leads to suboptimal outcomes, hindering the potential benefits of free trade.
- Game Theory and its application to international trade
- The Prisoner's Dilemma and its relevance to trade strategies
- The impact of aggressive bargaining on Pareto optimality
- The potential for sub-optimal outcomes in asymmetric trade scenarios
- The role of international institutions like the WTO and the EU in mitigating the effects of aggressive bargaining
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: Introduces the topic of aggressive bargaining in international trade, focusing on the increasing integration of European economies and the resulting growth of international trade.
- Game Theory: Explains the core concepts of game theory, emphasizing its applicability to the analysis of international trade interactions.
- International Trade: Discusses the historical evolution of trade theories, highlighting the contrast between Mercantilism's zero-sum perspective and the positive-sum approach championed by Smith and Ricardo. It then introduces the concept of aggressive bargaining as a trade strategy, demonstrating its impact on outcomes using the Prisoner's Dilemma model.
Schlüsselwörter (Keywords)
Game theory, international trade, aggressive bargaining, Prisoner's Dilemma, Pareto optimality, sub-optimal outcomes, WTO, European Union, trade strategies, tariffs, protectionism, free trade.
- Quote paper
- Mario Brückner (Author), 2003, Aggressive Bargaining leads to sub-optimal outcomes, Munich, GRIN Verlag, https://www.grin.com/document/30071
