Competition and cooperation in the energy strategy game

As the international prices of energy resources keep rising, some countries are trying to adjust their overseas energy strategies in order to gain more benefits. This paper, viewing from China´s standpoint, analyzes the case of dynamic game with incomplete information under the Harsanyi transformation based on KMRW reputation model. Taking the China-Japan, China-India energy game cases for instance, we find that the cooperative action could be the best strategy for both China and India according to our model, while the overseas energy strategy which is taken by Japan nowadays will do harm to its economic recovery and prosperity in the long run. According to the payoff expression, the adjustment of each country´s energy strategy inclines to be diversified in the energy constitution. The GDP and the economic growth rate can help abate the petroleum-dependency by developing the capability of R&D and deepening the exploration of new substitute energy.