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The Power of Non-Superpowers

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  • Tomoo Kikuchi
  • Shuige Liu

Abstract

We propose a game-theoretic model to investigate how non-superpowers with heterogenous preferences and endowments shape the superpower competition for a sphere of influence. Two superpowers play a Stackelberg game of providing club goods while non-superpowers form coalitions to join a club in the presence of externalities. The coalition formation, which depends on the characteristics of non-superpowers, influences the behavior of superpowers and thus the club size. In this sense, non-superpowers have a power over superpowers. We study the subgame perfect Nash equilibrium and simulate the game to characterize how the US and China form their clubs depending on other countries.

Suggested Citation

  • Tomoo Kikuchi & Shuige Liu, 2022. "The Power of Non-Superpowers," Papers 2209.10206, arXiv.org, revised Oct 2023.
    • Handle: RePEc:arx:papers:2209.10206
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