Trade diplomacy should include relational diagnostics---mapping zone dynamics in addition to tariff schedules and trade balances.
WTO and similar bodies can evolve into zone mediation platforms, using predictive analytics on trust trajectories.
RZE metrics offer early-warning systems for trade ministries and economic intelligence agencies to detect impending fractures.
Policymakers must consider nonlinear effects of symbolic gestures, such as blacklisting firms or cultural boycotts, which may shift zones more than material measures.
7. Extension Scenarios
Multilateral trade wars (e.g., US-EU-China triangle) with zone triangulation.
Zone transition under AI-mediated trade, where algorithmic trading creates invisible re-zoning without political intent.
Temporal zone decay: What happens when trust isn't renewed over time, even without active betrayal?
D. Comparative Results with Classical Models (Nash and Tit-for-Tat)
1. Objective of Comparative Evaluation
To validate the explanatory power and strategic fidelity of the Relational Zone Economics (RZE) framework, we conduct a comparative simulation between RZE and two classical baseline models: Nash Equilibrium (NE) and Tit-for-Tat (TFT). These models have served as cornerstones in strategic economic interaction and cooperation theory but often fall short in capturing dynamic trust erosion, strategic ambiguity, and long-term relational repositioning.
This section assesses how RZE differs from and potentially surpasses these models in simulating realistic trade and investment behavior under evolving strategic contexts.
2. Simulation Setup
a. Scenario: Strategic trade conflict between two nations with three interlinked sectors (technology, agriculture, and energy), each with varying sensitivity and historic relational dynamics.
b. Models Compared:
Nash Equilibrium (Static): Agents choose optimal strategies assuming perfect knowledge and fixed payoffs; equilibrium persists unless external shocks occur.
Tit-for-Tat (Iterated): Agents begin cooperatively, mirroring the last move of the opponent; escalation or cooperation depends on immediate history.
Relational Zone Economics (RZE): Agents dynamically shift zone positions based on trust memory, strategic ambiguity, long-term interest alignment, and payoff realism across zones.
3. Key Comparative Metrics
(Table not Inserted)
