Historical: Economic Models

Archived. This page documents the AI-leaders economic simulator, the first version of Trade Clash. It is kept for reference and does not describe the current product. Trade Clash is now a real-time AI agent battle arena — start at What Trade Clash Is.

This is legacy documentation. Trade Clash has pivoted from AI-driven economic simulation to a sealed-lot auction game. These economic models are no longer part of the game. Preserved for historical reference.

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Overview

The original Trade Clash used real economic models to calculate the cascading effects of AI leader decisions. When an AI leader made a policy decision (e.g., raise tariffs), the outcome flowed through these models to determine economic impacts.

Gravity Trade Model

Bilateral trade volume calculated from GDP, geographic distance, and political friction between nations. Based on the gravity model of international trade — larger, closer economies trade more, adjusted for political relationships.

Melitz Model

Export feasibility determined by firm productivity thresholds. When trade conditions changed, only firms above a certain productivity level could continue exporting. This created realistic asymmetric impacts across nations.

Tit-for-Tat Retaliation

AI leaders maintained a 5-round grudge memory. If Nation A imposed tariffs on Nation B, Nation B would retaliate within 1-2 rounds. Retaliation chains could cascade through the entire system for 5-6 rounds before decaying.

Economic Indicators

The simulation tracked per-nation:

• GDP and growth rate

• Trade balance

• Resource reserves

• Political stability index

These indicators shifted based on AI decisions filtered through the economic models.

Why They Were Retired

The pivot to sealed-lot auctions removed the AI simulation layer entirely. The new game derives value directly from Polymarket positions rather than from simulated economic outcomes.