Enrichment
How To Win A Trade War
4th April 2018
FiveThirtyEight has produced this super interactive game using game theory where you can find for yourself whether winning a trade war is as easy as President Trump appears to believe!
Winning a trade war has never been easier than with the FiveThirtyEight-dot-com Trade War Simulator! Try starting your own trade war today! https://t.co/ZfYxMDNbTD
— Nate Silver (@NateSilver538) March 28, 2018
It is a great example of the iterated Prisoner's' Dilemma
There are 100 rounds of trade with a randomly chosen FiveThirtyEight reader. In each round, you and your trade partner can either cooperate (allow free trade) or defect (impose an import tariff). Your goal is to pick a strategy that earns you as much as possible.
If you both cooperate in a given round, you each earn $15.
If you both defect, you each earn only $10.
If one of you cooperates and the other defects, the defector earns $25 while the cooperator earns only $5.
US plans 25% tariffs on 1,300 Chinese imports https://t.co/qq9U9Zgfxw
— BBC World Business (@BBCWorldBiz) April 3, 2018
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Synoptic Revision Mats
Resource Collection
- Economics
- Blog
- Enrichment
- Import Protectionism
- Creeping Protectionism
- Game Theory
- Nash Equilibrium
- Prisoners’ dilemma
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.
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