Three trade wars are examined using variable-sum game theory. The Anglo-Hanse trade wars (1300–1700) are explained as an iterated Prisoners' Dilemma that failed to evolve into cooperation due to transaction costs, rent seeking, and economic recession. The late-igthcentury tariff war between France and Italy is a case of an asymmetric trade war that illustrates the danger to a weak country of provoking a trade war with a strong country, with the result that the former is forced to make major concessions. The Hawley-Smoot conflicts of the 1930s are cited as an example of the cooperation-inhibiting effect of publicness in trade negotiations.

Aside from language, students of international relations in the United States and Great Britain have several things in common: parallel developments in the emergence of international relations as a field of study after World War I, and more recent efforts to broaden the field by drawing security issues and changes in the international political economy under the broad umbrella of “international studies.” But a review of four recent books edited by British scholars demonstrates that there is also a “distance” between British and American scholarship. Compared with dominant trends in the United States, the former, though hardly monolithic and producing a rich and varied literature, is still very much attached to historical analysis and the concept of an “international society” that derives from the period in modern history in which Britain played a more prominent role in international politics. Because trends in scholarship do, in fact, reflect national political experience, the need continues for transnational cooperation among scholars in the quest for strong theories in international relations.

The late interwar years encompass a full spectrum of international monetary conflict and cooperation. Why did Great Britain, France, and the United States cooperate in some periods and not in others? First, the transience of monetary cooperation and conflict is explained in part by inherent characteristics of gold exchange and floating monetary systems. Second, environmental changes—swings between prosperity and depression, between peace and the threat of war, and between monetary orthodoxy and inflationist heresy—altered the strategic setting confronting the central monetary powers. Third, the actions of governments both followed from and shaped the circumstances that they confronted. Through strategies of composition across issues and decomposition across time and actors, nations deliberately fostered the emergence of cooperation by altering the context of monetary diplomacy.

Cooperation among creditors has been the foundation of international debt arrangement! and is critical to preserving the value of foreign capital. Such cooperation is inherently difficult because every debt rescheduling involves hundreds of banks worldwide, each witr its own financial interests. Nevertheless, large money-center banks have been able to devisi common negotiating positions and conclude rescheduling agreements. Their cooperation i based partly on their extensive daily interactions, which permit both reciprocity and retal iation. In addition, most large banks are permanent fixtures in international capital markets; their ties to other banks and foreign borrowers could be jeopardized if they obstructed a rescheduling. Smaller banks, which lack these international ties, are more apt to hold out from joint arrangements. To secure their agreement, creditor committees (composed of large banks) rely on their domestic ties to these smaller institutions, which is occasionally reinforced by support from central banks.

Cooperation and discord in world politics are explained to a considerable extent by the three factors discussed in the Introduction: mutuality of interest, the shadow of the future, and the number of players. Yet the context of interaction, perceptions, and strategies is also important. Issues are linked to one another through multilevel games, which may be compatible or incompatible. Whether reciprocity constitutes an effective strategy depends both on linkages among issues and on the institutions within which negotiations take place. Perceptions are always significant and often decisive. Decision makers often actively seek to change the contexts within which they act by linking issues, trying to alter others' perceptions, establishing institutions, and promoting new norms. This finding suggests the importance of linking the upward-looking theory of strategy with the downward-looking theory of regimes.

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