Political Economists Can Gain A Useful Insight Into The Utility Of Economic Sanctions

Negotiation is a fundamental form of dispute resolution involving two or more parties (Michelle, M.2003). Negotiations can also take place in order to avoid any future disputes. It can be either an interpersonal or inter-group process. Negotiations can occur at international or corporate level and also at a personal level. Negotiations often involve give and take acknowledging that there is interdependence between the disputants to some extent to achieve the goal. This means that negotiations only arise when the goals cannot be achieved independently (Lewicki and Saunders et al., 1997). Interdependence means the both parties can influence the outcome for the other party and vice versa. The negotiations can be win-lose or win-win in nature.

A. Identify the issues that you thought were the most important issues to be negotiated, and briefly explain why you thought they were the most important.

To deepen my knowledge of this topic, I took Coursera’s online game theory course, which inspired my EPQ title -‘To what extent can game theory justify Malaysia’s decision to join the TPPA?’. By creating payoff matrices for trade between several pairs of countries, I discovered that most of the matrices illustrated a Nash Equilibrium that was not Pareto efficient. This implied that outcomes were suboptimal even when agents made their perceived ‘rational’ choice; every country negotiating a trade deal that served their best interests could make the global economy worse off. However, a key limitation of such analysis is that the game-theoretic models I was employing assumed that agents were perfectly rational. Inspired by Kahneman’s ‘Thinking, Fast and Slow’, I challenged this assumption by applying aspects of behavioural economics such as anchoring, herding, and moral hazard to analyse how policies can be crafted to align the incentives of different stakeholders; this helped me attain a runner-up finish in the Malaysian Economic Public Policy

Russia, Ukraine, and Crimea are the direct actors of the Ukraine crisis, who are all involved at different capacities. Realism explains that actors behave selfishly because humans are inherently evil. Actors, also, work to obtain security through power and fear, but realism also leaves space for weak states to “accept what they must.” Realism relies on the anarchic international system because states are sovereign, and states cannot be persecuted for breaking international law. The realist theory describes the past actions of Russia, Ukraine, and Crimea, and can be used to predict future actions. Each actor has different political and social factors that

Realism is the preeminent theory of International Relations, as it provides the best explanation for what is going on today in the modern world in case of conflicts and political disputes. Realism can be broken down in three elements: Survival, Statism and Self Help. Survival is fundamentally the basic instinct of any state. Not to forget that in International Relations, states are known as “Actors” (O’Neil, 2009). Survival mostly kicks in when a state is under anarchical rule, or simply “a state with no higher authority” (Mearsheimer, 2008). Statism on the other hand concentrates on economic controls of a highly centralized government often extending to government ownership of industries. And finally Self Help. Self Help is basically being able and adapted to succour one’s state in times of hardship and distress. Even though there are many different elements and

The theoretical framework I develop rests on the assumption that individuals are rational actors insofar as they calculate and act to maximize their expected utilities. An illustration of this assumption is found when the expected utility of continuing a war is outweighed by the expected utility of war termination. When the expected costs of continuing a war exceed the expected benefits, the relevant actors will begin to press for peace. I further assume that leaders act to maximize their chances of retaining office and that they are accountable to a domestic audience. The composition and preferences of this domestic audience varies systematically across regime type, as does their ability to credibly deter the leader. This has important

Game theory cannot always predict reliable outcomes for real-life situations as it is more an

Economic Sanctions are the interruption by one state imposed to another for the purpose to command a specific demands by the state, such as political changes. The originator states views the sanctions and the economic relationships it has with that country and the number of states that will initiate the sanction. Different sanctions are placed on states due to the effectiveness of the tool. Economic sanctions are a viewed as a political tool utilized as an alternative to armed conflict or military interventions. Sanctions have been placed on states in order to change a political or military behavior as a more peaceful measure to prevent war. These instruments are considered to be controversial policy as they can damage the economy of another states. Historically states placed under embargoes have suffered major economic downfalls and weakened the economic environment to a atrocious manner that hurts the trade, citizens and businesses established in the state. Embargoes are a way to impede the state from having any trade with the initiating state and placing a commercial blockage on their economy. Embargoes are considered to be a strong diplomatic measure to impose a effort in part from another country. They are seen as the enforcement of peace to a state while other diplomatic efforts have failed by the initiating state. In order for

While these two theories are not alone in the domestic level of analysis, they are the most comprehensive. The next-best level of analysis would be the systemic level. According to Copeland, the systemic level of analysis is the, “external situational factors inherently outside of the executive and/or state,” (Copeland Lecture). These external factors can take numerous forms, such as the distribution and trend of power or the perception of offense or defense dominance. The various facets of game theory also deal with the systemic level, as strategic interaction within a system. Systems can be unipolar, with one hegemonic power, bipolar, with two hegemonic powers, or multipolar, with numerous powers in a given system. As with the other levels of analysis, there are numerous theories within the level, such as the cult of the offensive or dynamic differentials theory. Cult of the offensive refers to the belief of the states in a system that offensive policies are stronger and superior to defensive policies (van Evera 58). Dynamic differentials theory draws on the trends in the balance of power in a system, where the declining power recognizes that not only are they declining, but that another state is rising, so the declining dominant state initiates preventive war in order to try and prevent the other power from overtaking them (Copeland Lecture). Both of these theories, as well as much of this level of analysis deal with the security dilemma.

The game theory was created in 1944 when mathematical genius John von Neumann and the economist Oskar Morgenstern published their book Theory of games and economic behavior (Brandenburger & Nalebuff, 1995). Till this day, their work provides a systematic way to understand the behaviors of player in situations where their fortunes are interdependent (Brandenburger & Nalebuff, 1995). “Game theory is a sort of umbrella or ‘unified field’ theory for the rational side of social science, where ‘social’ is interpreted broadly, to include human as well as non-human players.” (Aumann, 1987).

This paper was prepared for GD530 Economics and the International System, taught by Professor Snow

Game Theory and Economic Analysis presents the wide range of current contributions of game theory to economics. The chapters fall broadly into two

John Von Neumann (mathematician) and Oskar Morgenstern (economist) introduced game theory in 1950s for the first time as a mathematical instrument, used to define and solve games, []. It provides a set of quantitative and analytical tools for

Game theory is the study of strategic decision making, cooperation and conflicts. The concepts appear when the actions of several agents are independent. The agents are like groups, individuals, firms or any combination of these. These ideology of provides a language to formulate, structure, analyze, and strategic scenarios. Specifically, it is the study of mathematical models of conflict and cooperation between intelligent rational decision makers. This is mainly used in economics, psychology, logic and biology.

In examining Kenneth Waltz 's “Structural Realism after the Cold War,”1 and Andrew Moravcsik 's “Taking Preferences Seriously: A Liberal Theory of International Politics,”2 it is clear that theories presented in each (Realism and Liberalism) are at odds with one another in many ways. But why did the authors reach the conclusions they did about the way that states behave in the international system? This paper seeks to answer that question.