POLI 359 Lecture Notes - Lecture 1: World Trade Organization, Capital Control, Asian Infrastructure Investment Bank
3 Oct 2016
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Document Summary
Explain and explore most important realist theories to understand international cooperation. How international regimes can produce a long shadow of the future. Instead of playing the prisoner"s dilemma once, you play it numerous times. Tit for tat = in time t, we decide to all cooperate, but if someone defects, then the next time you won"t cooperate. Pareto efficient equilibrium = all countries are better off in this strategy. Some games are easier than the prisoner"s dilemma. International regimes provide forum to communicate = helps solve cooperation problems. Long shadow of the future --> tit-for-tat --> pareto-efficient equilibria. Constraining countries" behaviour --> increasing information --> reducing transaction costs. Institutions constrain countries" behavior by establishing regulations, rules and norms. By constraining that, int regimes make the international system more predictable = countries can have a guess on what others are doing. = higher level of information which reduces transaction costs. Relationship linear between incentives and transaction costs.
