Is America Unrivaled? A Repeated Game Analysis
I use a strategic setup to investigate whether unipolarism can indeed persist as a long run equilibrium. In a three-country world, a global power may subsidise two satellites so as to incentivate them not to invest to build up a coalition against it. I single out the conditions under which the one-shot game is a Prisoners’ Dilemma where no subsidy is paid and the coalition arises at equilibrium. Then, I revert to the infinitely repeated game and apply the Perfect Folk Theorem to characterise the critical thresholds of discount factor sustaining unipolarism at the subgame perfect equilibrium.
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- Skaperdas, S. & Syropoulos, C., 2000.
"Guns, Butter, and Openness: On The Relationship Between Security and Trade,"
00-01-23, California Irvine - School of Social Sciences.
- Stergios Skaperdas & Constantinos Syropoulos, 2001. "Guns, Butter, and Openness: On the Relationship between Security and Trade," American Economic Review, American Economic Association, vol. 91(2), pages 353-357, May.
- James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Oxford University Press, vol. 38(1), pages 1-12.
- R. Harrison Wagner, 2004. "Bargaining, War, and Alliances," Conflict Management and Peace Science, Peace Science Society (International), vol. 21(3), pages 215-231, July.
- Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-54, May.
- Abreu, Dilip, 1986. "Extremal equilibria of oligopolistic supergames," Journal of Economic Theory, Elsevier, vol. 39(1), pages 191-225, June.
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