Recently, the sovereignty of Diaoyutai islands has happened serious disputes among Japan, China and Taiwan. This paper intends to study and analyze the disputes concerning Diaoyutai islands from the viewpoint of game theory. Two game theory modelsare applied for analysis of their strategies. Firstly, the interactive behaviours between Taiwan and Japan are modeled as a Hawk-Dove game, after which the first-move advantage is derived from the Nash Equilibrium. Secondly, the conflicts between China and Japan are modeled as a repeated game. They both face prisoner's dilemma in a short-term relationship. Because China will punish Japan, the mutually beneficial outcome can be achieved in a long-term relationship. China and Japan will cooperate to manage the resources of Diaoyutai islands in the future. Taiwan proposed the East China Sea Peace Initiative which hopes all sides involved can work together in reducing discord and leading three countries on the path of peace and cooperation. The study concludes and suggests Taiwan should not cooperate only through concessions, but also should be based on the protection of inherent rights through dialogues, knowledge and law.