The Expressive Free Trade Agreement

Abstract

In the international investment context, this paper focuses on the power of the FTAs or BITs; expression of them may impact the players in the games. First, the paper examines the boost of the BITs and FTAs. The main focus is to test the application of game theory to the FTAs or BITs; the one is sequential game and the other is simultaneous (two-by-two) game, which the FTA would have the same setting. The question is how the states would play in the game table of the FTAs. In games, this paper tries to find Nash equilibrium in pure strategies. It assumes perfect to simplify the games. Calculating the probability in mixed strategy and in the imperfect information is out of the scope of the paper. Second, the paper tests the expressive law, which includes point. It delves into the creation and function of the focal points and what their implications to the FTAs are. The paper assumes that the FTA may be an power for the players when they form the future agreements. I take the example of newly signed: the Korea-US FTA, putting put into the Hawk-Dove (HD) game, which would lead to two potential equilibriums. The prevalence of one of them depends on which one is more salient. Also, traders' game and naked traders' game applies the logics in the prisoner's dilemma to international trade context. Last, the paper shows the impact of the FTAs after they are signed.