If governments make trade policies based on national economic welfare, is the problem of trade warfare still represented by a Prisoner€™s dilemma game as in Table? What is the equilibrium solution to the game if governments formulate policy in this way? Would they ever choose the strategy ofprotectionism?

Transcribed Image Text:

The Problem of Trade Warfare Japan .s Free trade Protection Free trade 10 20 10 10 -10 -5 20 Protection