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Economic Interdependence and Peace: A Game-Theoretic Analysis

Published online by Cambridge University Press:  24 March 2016

Brett V. Benson  and
Emerson M. S. Niou
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Extract

Most of the contemporary policy debate regarding economic interdependence and peace has focused on devising responses either in favor of or in opposition to the prevailing notion that trade is positively and unconditionally correlated with peace. The China and Taiwan case—noteworthy for the simultaneous presence of an ever-increasing economic interdependence and an adversarial political relationship—provides an interesting counterexample to the leading positions in the literature. What is missing in the literature is a model that studies states' decisions to trade and initiate conflict as a function not only of their own utility but also of their perceptions about how their opponent will respond. States' decisions to trade depend on the likelihood that their prospective trade partner will initiate a conflict, and decisions to initiate a conflict depend on perceptions of the likelihood that the target will concede. In this article, the authors develop a model that expands the domain of the trade-peace analysis by endogenizing and analyzing states' decisions to trade and initiate conflicts.

Keywords

economic interdependencedependence theorytrade and peaceeconomic sanctionissue linkagecross-strait relationsTaiwan StraitChinese economyTaiwan independencegame theory
Type
Articles
Information
Journal of East Asian Studies , Volume 7 , Issue 1 , April 2007 , pp. 35 - 59
Copyright
Copyright © East Asia Institute 

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References

Notes

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