http://gametheory101.com/courses/international-relations-101/
We know that trade leaves both parties better off. Then why would states bicker over trade agreements? In this lecture, we see how trade deals can be better for some parties and worse for others. As a result, states have incentive to try to steal all of the surplus of bargaining while simultaneously understanding that failure to reach an agreement leaves everyone worse off. In other words, trade rivalry creates a classic bargaining problem.
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