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The Correlation between Game Theory and International Trade

Author

Listed:
  • Ioana-Veronica ALEXA

    (Faculty of Economics and Business Administration, Dunarea de Jos University of Galati, Romania)

  • Simona-Valeria TOMA

    (Faculty of Economics and Business Administration, Dunarea de Jos University of Galati, Romania)

Abstract

Game theory, in its most basic form, considers two or more players and analyses the different strategies that they can use and the effect that these strategies will have on each player. International trade allows countries to use better their resources (labor, technology or capital). Since countries have different capital or natural resources, some of them will produce a good more efficiently than others and therefore could sell it cheaper than other countries. By using game theory in international trade we could determine if the Heckscher-Ohlin-Samuelson model is correct and what would be the best specialization for each country. The aim of this paper is to test if game theory could be successfully used in a thorough analysis of international trade specialization

Suggested Citation

  • Ioana-Veronica ALEXA & Simona-Valeria TOMA, 2012. "The Correlation between Game Theory and International Trade," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 2, pages 67-74.
    • Handle: RePEc:ddj:fseeai:y:2012:i:2:p:67-74
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    File URL: http://www.ann.ugal.ro/eco/Doc2012.2/Alexa_Toma.pdf
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    References listed on IDEAS

    as
    1. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, December.
    2. Findlay, Ronald & Kierzkowski, Henryk, 1983. "International Trade and Human Capital: A Simple General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 957-978, December.
    3. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-266, April.
    4. William A. Kerr & James D. Gaisford (ed.), 2007. "Handbook on International Trade Policy," Books, Edward Elgar Publishing, number 3521.
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    Keywords

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    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • F10 - International Economics - - Trade - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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