Department of Economics
Economics 92, Principles of Microeconomics (Honors)
A Static Game with Incomplete Information
|No Concessions||Make Concessions||No Concessions||Make Concessions|
|China||No Concessions||0, 0||-2, 0||-2, 0||5, -2|
|Make Concessions||-2, 7||5, 5||0, 5||7, 7|
In this game the US and China are negotiating a new trade treaty. The payoffs are indices of change from the status quo that include things like economic gain, perceptions of residents of the home country, and stature in the world. The USA negotiator, Carr Ben Steele, knows his type. But the Chinese negotiator, Hai Lo, doesn't know know Carr's type.