Game Theory Analysis Of Import And Export Trade Of High & New-Tech Industry

With the development of world economic globalization and integration, the economy competition is getting fierce with every passing day; the focus of the competence has changed from traditional productive factors such as land, physical labor and capital, to talented people, technology, information and the derived high and new technology industries. Different countries adopt various measures to encourage actively developing high and new technology, competition participating in high and new technology industries, to activate their development of the economy. How to take advantage of the characteristics of incomplete competitiveness, mutual dependence on strategic choice, dynamic scale economy and the technology external, to price their products and improve the quality, and how to get a win-win result on trade policy, all of these problems has been the key aspects for different countries to develop their high and new tech industries. To find out the answer, I would use tools of the Game theory to do some analysis.Firstly, the Hotelling theory is used to analyze the problem of pricing the products. We would find out that equal pricing would bring them greatest profits when maximizing the differentiation of products and same level protection. Resolution is that countries are necessary to cooperated in a organization of High and new technology industries. To get agreement on pricing, and eliminate disputes and avoid the result of both lose. And there should be a mature international legal system and a steady circumstance.Secondly, the Quality-Product-Price Competing theory is quoted here to analyze the quality aspect of high and new tech products in foreign trade. We would find out that the price is strategically supplied each other, and the quality would move to same direction. The win-win result in international trade needs continually renovation, improving differentiation, and avoiding harmful competition. The resolution is that different countries need adjust their product's differentiation, explore their own markets and consumers, avoiding discount competition, and the following trade disputes.Thirdly, limit repeat game and the limitless repeat game are take advantage here to analyze government's trade protection policy (subsidy). We would find out that the cool blood strategy is the best choice for parties. And in the cool blood strategy, nonprotection-nonprotection choice is the answer for two country's protection policy to get subgame perfect Nash equilibrium in limitless repeat games. That brings parties out of the prisoner's dilemma as limit repeat game works. That is to say that free trade would bring max profit. The ultimate resolution is that the policy established by the government should be as loose as possible to make sure its high and new tech industry develop in a free trade circumstance.