The high-stakes US-China showdown is hardly a game, but strategists see ‘game theory’ at work in trade war’s tactics, weapons and risks
- Experts predict a deal that Trump will claim as a great victory but that doesn’t significantly change Beijing’s controlling economic tactics
- ‘Like World War I, the two players are holding out for a win in the war of attrition,’ says a professor of managerial economics and decision sciences
Expect US President Donald Trump to emerge from this high-stakes US-China trade war with a face-saving deal that he will spin as a great success – but one that fails to fundamentally change China’s state control over markets, subsidies and theft of trade secrets.
That is the conclusion of experts in game theory and strategic negotiation based on an analysis of the plans, tactics and pressure points of both sides.
Game theory, which looks at strategic interaction among rational decision makers, was pioneered by mathematicians in the 1940s as a way to improve their modelling and has since been extended to a wide range of behavioural areas involving humans, animals and computers.
Viewed through this lens, the US-China trade war falls into the “war of attrition” category, in which two relatively dominant players stick doggedly to their incompatible positions, each expecting the other side to fold so they can emerge the winner, experts say.
The most famous example of this kind of showdown is the first world war.
But recent business examples include the confrontations between digital radio rivals Sirius and XM, social media players Facebook and MySpace, and digital auctioneers eBay and Yahoo, they say.