Two-Stage Games of Complete but Imperfect Information: Application in International Trade with Tariff




game theories, firms, models, economics, trade, comparing, finance, country


Trade relationships are very complicated especially given the battles between Keynesian and Neo-liberal economic views on the issue. Game theory and its application in international trade can provide a simplistic but important method for quantifying the benefits of trading. In this paper, we intend to use two-stage games of complete but imperfect information in the trading context among two and three countries and compare it with the non-trading country. The purpose of this work is to apply a two-level game model of complete but incomplete information in game theory and apply it to international economics in the context of customs trading. The basic literature for this work is “Game Theory for Applied Economists” by Robert Gibbons. Glenn W. Harrison and E. E. Rustrom on Trade War, Trade Negotiation, and Applied Game Theory. We provide mathematical models and eventually provide the interpretation in a broader context.

Author Biographies

Zuhriddin Juraev, +821023609404

Ph.D. Student

Chonnam National University

Faculty of Social Sciences


Nuriddin Makhmudov, Chonnam National University

Master's degree student

Faculty of Social Sciences

Department of Economics


Abdelhakim Hammoudi, Nabyla Daidj (2017) Game Theory Approach to Managerial Strategies and Value Creation, Volume 3., Wiley Online Library.

Beed C, Beed C (1999) Intellectual progress and academic economics: rational choice and game theory. J Post Keynes Econ 22:163–185

Buhmann MD, Ablowitz MJ (2003) Radial basis functions: theory and implementations. Cambridge University, Cambridge.

Christin N (2011) Network security games: combining game theory, behavioral economics, and network measurements. Lect. Notes Comput. Sci. 7037:4–6

Ha Joon Chang (2007) Bad Samaritans, Bloomsbury Publishing.

Irina V. Gashenko, Irina N. Bogataya, Irina V. Orobinskaya, Yulia S. Zima (2018) The Essence and Peculiarities of Implementing the Optimal Scenario of Digital

Economy Development in Modern Russia., Models of Modern Information Economy.

George E.Halkos, J.PapageorgiouEmmanuel, G.HalkosJohn, G.Papageorgiou (2020) Public debt games with corruption and tax evasion., Economic Analysis and Policy., Volume 66, Pages 250-261.

Glenn W. Harrison and E. E. Rustrom (1991) Trade Wars, Trade Negotiations and Applied Game Theory, The Economic Journal Vol. 101, No. 406, pp. 420-435 (16 pages), Oxford University Press.

Robert Gibbons (1992) Game Theory for Applied Economists, by Princeton Univ. Press.

Federico Etro (2017) Research in economics and game theory. A 70th anniversary., Research in Economics., Volume 71, Issue 1, Pages 1-7.

Roger A. McCain (2019) Commitment and weakness of will in game theory and neoclassical economics., The Journal of Socioeconomics., Volume 38, Issue 4, Pages 549-556.




How to Cite

Juraev, Z., & Makhmudov, N. (2024). Two-Stage Games of Complete but Imperfect Information: Application in International Trade with Tariff. Academic Journal of Digital Economics and Stability, 37(2).