Using simple algebra in conjunction with an extended strategy game, this paper shows how China made a rational decision in passing the Anti-Secession Bill, given their options and knowledge of the situation at the time. It looks at how the extended-form game is ideal for this purpose because it allows for deferred and conditional decision making.
From the Paper:
"Amidst a flurry of electoral protests and political strife, stands China, a long time Communist regime worrying about its own secessionist movement. Since the communist revolution in the forties, the Chinese Nationalist Party (KMT) has occupied Taiwan and long since claimed autonomy and independence from its Chinese "compatriots". But with a mounting secessionist movement, mainland China felt it was time to put an end to the Taiwanese debacle by creating a new anti-secession law that would dictate its future interactions with the "rogue" island. China has always asserted the domestic nature of this issue, and has repeatedly called on the international community to respect its sovereignty and its territorial integrity with regard to Taiwan. As a consequence of this call Taiwan's official diplomatic relations with other countries has dwindled to as few as 25."