Game Indeterminacy & Trade War
Game theoretic models are directly relevant because trade wars are nothing but games. When the current trade war first broke out, many were betting that it would not last long. Now we are not so sure. This newly acquired sense of uncertainty matches the “game indeterminacy” caused by no party having complete control all the time over game outcomes. It is the relative strengths, driven by relative resources of players, that ultimately shape game payoffs.
Resources Are Better Packaged
Resources are packaged into categories, based on ownership (fully private owned versus publicly resources), natures (“hard” resources like GDP per capita versus “soft” like strategies, charisma & personality and what is increasingly important these days, information), timelines (“long” like tradition and culture, “medium” like equilibrium and precedence and “short” like instant situation and posteriority).
To use a simple example why packaged resources beat elementary resources, consider individual agent who is passionate about a job, a person, an occupation or a target but is weak in personal skills that can get her closer toward her object of passion. Meanwhile there is another agent who is equally crazy about the object but also skillful toward it. Guess who is more likely to achieve the object? The answer is obviously the latter rather than the former. Passion alone is an important elementary resource, but passion + skills are a package of resources, which beat the former hands down.
As if this packaged view were not complicated enough, we also must consider how the “package owners” or game players interact and the current status quo. Other things equal, the longer and wider a move has been in place, the harder it gets to change it. For example, the current backlashes have been so sweeping and deep cut that completely turning the tide or reversing the trend is getting more difficult by the day.