A Game Theory Study On Sino-U.S. Textile Trading

This paper establishes and perfects a game theory model on textile trading using the Game Theory and an example of textile trade between China and the United Stated, based on the current circumstance of the frequent friction on Chinese textile trade. In this paper, we analyze a series of changes and the intrinsic causes of relevant textile trading policies between these two nations before and after year 2005, in which the textile duties China imposed is used as the breakthrough, through the mathematical conclusions got from the game theory reasoning. And we deduce the equation on textile imports and exports duty rate and the optimal strategies of these two nations under a strictly hypothetical condition. We also obtain major factors that affect the export volume and optimal strategies of the two nations'textile enterprises. Then we get standard equations of several key variables and validate the capability of the mathematical models possess to explain these situations. After that we propose some pieces of policy advice on textile export duties pertinently and the countermeasures Chinese textile export enterprises should take in the textile international trading game, for example, If policy on textile export duty can't realize in the cooperation equilibrium got in the trading game, basically, the aim isn't able to get, so we must be careful of such actively set barriers; we should upgrade comprehensive national strength, enhance productivity and make production cost decline.Both the duty rate we deducted and the export volume attribute to the two nations'textile production cost, which validate the core theory in International Trade------The Comparative Advantage Theory from another side.And we can get a longtime co-integration relationship between the textile export volume and production cost of the two nations through a co-integration test on data we got, through which we test the game theory model deduction, export volume and the cost of export country have a reverse changes, have a positive changes with the cost of import country.