A game-theoretic model of the U.S. and China influence in Nepal

Abstract

One of the critical elements of Nepal's contemporary geopolitical reality has been maintaining cordial relations with the superpowers, i.e., the U.S. and China. Realizing its geostrategic sensitivity, Nepal's delicate balancing act is an attempt to avoid being drawn too closely into the trajectory of either country. At the same time, the rising cruciality of Nepal's geostrategic location in South Asia is also not to be ignored, the outcome of which is the more pronounced involvement of these powers in the Himalayan country. With both Washington and Beijing increasing their influence in every South Asian state, both powers compete to make their presence felt and enhance their influence. This sense of competition has been a significant motivator for new initiatives from both sides. These initiatives are generally soft-power based, with one usually countering the other. In the context of Nepal, similar soft-power competition has been visible since the start of the 21st century and is becoming more conspicuous with time. This attempt from both the players to court Nepal resembles a strategic game, where the decision and choice of one of the players define the next move of the other. This leads the research to realize that a game theoretical model of stylization and simplification of the U.S. and China initiative in Nepal attempts to understand better the players' behavior to help Nepal in its decision-making ultimately. Not limited to just the game between the U.S. and China, this research examines the U.S.-Nepal and China-Nepal game to provide insights into the complex strategic dynamics of the U.S. and China's influence in Nepal. Furthermore, using game theoretical attributes, the research also attempts to study the outcomes the games between the U.S., China, and Nepal., while also theoretically predicting the possible outcomes. Keywords: Game Theory, U.S.-China Game, Prisoner’s Dilemma, Nash Equilibrium