We’ve simplified trade dramatically: You’re engaging in 100 rounds of trade with a randomly chosen FiveThirtyEight reader. In each round, you and your trade partner can either cooperate (allow free trade) or defect (impose a tariff). Your goal is to pick a strategy that earns you as much as possible.
If you both cooperate in a given round, you each earn $15.
If you both defect, you each earn only $10.
If one of you cooperates and the other defects, the defector earns $25 while the cooperator earns only $5.
Friendliness
As a baseline, how often (as a percentage of all rounds) will you cooperate, allowing free trade between your country and your opponent’s?
Imitation
Once trade begins, your opponent’s policy could be unpredictable. How often (as a percentage of all rounds) will you abandon your baseline strategy to mimic their actions, responding to them in kind?
Vindictiveness
If you’re crossed by an unkind, defecting opponent who imposes tariffs on your goods, how long (as a percentage of the remaining rounds) do you hold a grudge, putting your other strategies aside to punish the other country by defecting yourself?