INTERNATIONAL COLLABORATION IN ASEAN: A STUDY OF BARGAINING GAME MODELS WITH 'BAYESIAN' PLAYERS (SOUTHEAST ASIA)

The Association of Southeast Asian Nations (ASEAN) is modeled as a noncooperative bargaining game played by ASEAN's member nations. Through negotiation, the players choose one among several alternative foreign policies involving coordination of behavior. The model is applied to ASEAN's Preferential Trade Arrangements, the centerpiece of trade liberalization in SoutheastAsia.; Each game is solved by applying John Harsanyi's concept of "risk dominance," a version of the Nash bargaining solution that assumes players are 'Bayesians' who maintain mutual expectations in each other's rationality. As an extension of Harsanyi's idea, the players in the model process news of major events and periodically revise expectations, or images, of foreign policy alternatives. Initial differences and subsequent changes in expectations are encoded in a Bayesian framework. Changing expectations sometimes give rise to new risk dominance relations and new solutions.; To an extent, solutions to the model explain changes in the historical behavior of ASEAN. The model also has predictive interest and, by employing hypothetical scenarios, offers some insight into the future of ASEAN relations. Aspects of the model might be applied to other instances of international cooperation.