Bilateral Trade between the Eurozone and China: A Zero-Sum Game Theory Approach

Eneias Strakoshia and George Petrakos

International Business Research, 2016, vol. 9, issue 1, 35-42

Abstract: Over the last decade, the whopping growth of the Chinese economy, due to the liberalization of its market, with regard to the vulnerable Eurozone’s economic activity, has led to trade disputes between the two economies. In order to best capture and describe these implications, we attempt to approach their moves and payoffs through a combination of strategic and analytical tools such as zero-sum games and multiple regression models. Data and metadata for both economies were obtained from official sources, mainly the Eurostat and the National Bureau of Statistics of China and used as input in the regression model. Subsequently, the model output was used as input in the zero-sum game. The results of this process pointed out the best strategies that the players should follow in order to avoid great losses.

Keywords: international trade; trade balance; zero-sum game; regression model (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ibrjnl:v:9:y:2016:i:1:p:35-42

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