STRATEŠKE INTERAKCIJE U TRGOVINSKIM RATOVIMA: ANALIZA SCENARIJA KROZ PRIZMU TEORIJE IGARA | EKONOMSKOGA MODELIRANJA
STRATEGIC INTERACTIONS IN TRADE WARS: SCENARIO ANALYSIS THROUGH THE PRISM OF GAME THEORY AND ECONOMIC MODELLING

Summary/Abstract: This paper analyzes global scenarios of trade wars and their economic consequences, with a special focus on small open economies. Using a combination of game theory and logistic models and general equilibrium (CGE) models, the research of the quantified economic impact of different scenarios of trade conflicts for the period 2025-2030. The methodological approach combines Monte Carlo simulations with a tripartite game theory model that analyze strategic interactions between the US, China and the European Union. Probabilistic scenarios have been developed that range from the best to worst outcomes of trade wars. Key findings show that an escalation of trade conflicts could lead to a 1-1.8% decline in global GDP, with the probability of a recession varying from 6.67% for the global economy to 28.1% for the European Union in the worst-case scenario. Croatia, as a small open economy, could experience a drop in GDP of up to 4.7% in a full escalation scenario. The research reveals that trade wars are a negative-sum game with no winner, where the Nash equilibrium leads to suboptimal outcomes for all participants. Small economies face a dual challenge – they have no control over the trade policies of large economies, but are exposed to all their outcomes.

• Details
• Contents