The Theory Of Public Goods And Prisoner 's Dilemma

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The theory of Public Goods and Prisoner’s Dilemma games have been used on numerous occasions to characterize bargaining situations in the International Political Economy. The Prisoners Dilemma is an abstract game model that is often used to depict the difficulties that governments face when trying to cooperate in the global economy. Unfortunately, within International Trade, there are aspects that may take the form of the prisoner’s dilemmas than public goods. Public goods are also called collective goods. These are goods that cannot practically be withheld from one consumer without withholding them from all. In the Prisoner’s Dilemma model, only one prisoner, or state can go free. This situation can only happen at the expense of the others. A country can liberalize, by opening its market to for another country to export. A country can protect itself by using tariffs to keep the other countries products out of its domestic market. The prisoner’s dilemma outcome of protect and liberalize are more preferred than to liberalize and liberalize because the initiator gains from the tariffs, while their trading partner benefits from being able to access from that country. The theory highlights that when each country pursue their own self- interest, then the outcomes are worse than if they had of cooperated with another country. Although, it does show that cooperation is not always in one’s best interests. Pareto optimal is where there is no single actor or state that is better off

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