Current events have become increasingly centered around military action as of late. Russia in Ukraine and China in the South China Sea provide news outlets with a constant supply of content. As Americans, we have concerned ourselves more and more with our position in a possible conflict with China. We do not fully know their capabilities but recent Naval intelligence models suggest their current standings in relation to our force. China, likewise, does not fully know our military strength but they have a basic analysis. With this in mind, a model can be formed as neither side has perfect information and makes decisions without inter-player communication. Within our Game Theory matrix (fig. 1), the US and China are deciding wether or not to send ships to International Waters around Taiwan, or in other-words act aggressively or peacefully. The Dominant Strategy for both nations would be to send ships and act aggressively. China, however, did not act to their dominant strategy in actuality during Nancy Pelosi's visit. There was a surprising absence of Chinese naval vessels in the waters around Taiwan, but a massive showing of US force (Teddy Roosevelt's Big Stick). While the option chosen in reality was Pareto Efficient (U Agg., C Peace), the dominant strategy equilibrium here would be Pareto Inefficient, as both countries would be better off without either one being worse off. The employment of outside means, such as the UN Counsel, could perhaps create incentives in order to move towards a more Pareto efficient outcome, like in the case of the Taiwan visit. The outside incentives from foreign allies made China take the "peaceful" approach in this instance. As the aggressor, the US gains so much from the International and domestic communities in terms of respect and military support. China has few allies internationally and so must stand on their own. Time will tell what will happen in the future, but for now, there is quite a prisoner's dilemma between the two Superpowers.
fig. 1
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