This is economically irrational to the tune of tens of billions of dollars. If Beijing truly does this, it somewhat cements the argument that TikTok was a CCP policy tool.
I think it is reasonable that Beijing will not allow any sort of sale just for posture purposes. They don't want to be see as forced by Washington to do something and they care less about private economic outcomes than we do here, at least on the surface.
Depends. If you model this as a reputation game, depending on who is the sane and who is the crazy sender, the PBE might might be a pooling equilibrium(i.e makes sense to build the reputation of being a predatory firm).
> makes sense to build the reputation of being a predatory firm
To what end? It isn't going to placate the hawks in America. And it's likely to inflame them elsewhere, e.g. in Europe. The only way you can position it as a win is within China's domestic politics, where it would save face for Xi and his acolytes. (Hence, the inefficiency of dictatorship.)
I wasn't making a concrete case(I have no idea what is either in U.S gov's or Xi's head), was just making the point that when you allow for signals with costs and subsequent belief updates then setting multiples of billions of dollars on fire may be economically rational.
This is economically irrational to the tune of tens of billions of dollars. If Beijing truly does this, it somewhat cements the argument that TikTok was a CCP policy tool.