Hawkeye

Hawkeye Play · Chapter 1 · Political · Economic · Legal

Trade or tariff

Two countries trade every year. Each year, each can keep its market open or put up a tariff. What happens depends on whether they expect to meet again.

The rules

Each round, both countries choose at the same time. Points are made up. Both open: 3 each. Both tariff: 1 each. One tariffs while the other stays open: the one with the tariff gets 5 and the open one gets 0. This is the payoff pattern of the prisoner’s dilemma.

What the model typically shows

Total points in a round-robin, 1 round per match
Hardliner20Mirror9Opener9Grudge-holder9Forgiving mirror9
Data table
Totals, 1 round(s) per match
StrategyPoints
Hardliner20
Mirror9
Opener9
Grudge-holder9
Forgiving mirror9
Total points in a round-robin, 10 rounds per match
Mirror99Grudge-holder99Forgiving mirror98Hardliner96Opener90
Data table
Totals, 10 round(s) per match
StrategyPoints
Mirror99
Grudge-holder99
Forgiving mirror98
Hardliner96
Opener90

Takeaway

In a single round of this game, putting up a tariff scores more whatever the other side does. When the same two sides expect to meet many times, strategies based on reciprocity can start cooperating, do well against a wide range of other strategies, and resist being displaced once they are common.

Sources for the model:

What this model leaves out

  • Real trade involves many goods, many countries and domestic politics, not one yes-or-no choice.
  • Real countries can talk, sign agreements and go to dispute panels; here they only see each other’s last move.
  • The points are invented and the same for both sides.

In the real world

Figures already sourced on the Earth page. The game itself uses made-up numbers.