Main menu For students For teachers Explore our subjects Student events & courses

Teaching Economics

Enrichment

How To Win A Trade War

Geoff Riley

4th April 2018

Share this content:

FiveThirtyEight has produced this super interactive game using game theory where you can find for yourself whether winning a trade war is as easy as President Trump appears to believe!

It is a great example of the iterated Prisoner's' Dilemma

There are 100 rounds of trade with a randomly chosen FiveThirtyEight reader. In each round, you and your trade partner can either cooperate (allow free trade) or defect (impose an import tariff). Your goal is to pick a strategy that earns you as much as possible.

If you both cooperate in a given round, you each earn $15.

If you both defect, you each earn only $10.

If one of you cooperates and the other defects, the defector earns $25 while the cooperator earns only $5.

Share this content:

Geoff Riley

Geoff Riley FRSA has been teaching Economics for nearly forty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD and Revision conferences in the UK and overseas.