The balance of threat across the Taiwan strait: A game theoretical analysis

Abstract

Based on Stephen Walt’s balance-of-threat theory, this article models the interactions among the United States, Taiwan, and mainland China in a three-stage sequential game of complete information, and the interactions between Taiwan and mainland China without the U.S. commitment to defend Taiwan in a two-stage sequential game of complete information, respectively. By comparing the equilibria of these two games, this article explores theoretically the U.S. role in constructing the balance of threat across the Taiwan Strait. Furthermore, based on the scenarios yielded by the three-stage sequential game, this article narrates the evolution of security situation across the Taiwan Strait and how the United States has been maintaining the balance of threat in that area. In conclusion, this article speculates on the future of cross-Strait relations.