What game theory tells us about China-Taiwan face-off
SummaryWe could expect a sequential game to play out between the two in the absence of any dominant strategy or Nash equilibrium
Globally, strategies and decisions taken by individual countries are not based on a perfect information scenario. In general, while individual jurisdictions and groups do not ignore the possible actions of other countries and groups, a lack of information on what others may do results in asymmetry. Their decisions not only depend on visible actions by others, which they take as a given in many situations, decision-makers pay attention to alternate scenarios of potential action taken by others. Thus, these strategic interactions can be modelled using Game Theory. Of special relevance are strategies adopted by countries during war or tension with adversaries. The ongoing China-Taiwan tension is one such scenario that could be analysed from a Game Theory perspective.