Divination

Game theory is a bit like looking into the future. If you can correctly analyze the game you can determine with a degree of certainty that an outcome will or will not come to pass. But in a real world application, the knowledge of a logical outcome of a game could be game changing in itself.

Consider Iran. Bueno de Mesquita, an economist at NYU, has determined that Iran will only come close to making a nuclear bomb, but will not actually follow through with it. This game includes nearly 90 players over series of time, some of whom are institutions, people and foreign governments. A political game like this one uses all the familiar assumptions found in simpler games, but brings an unusual one to light – that none of the players know the ultimate outcome of the game. This is an obvious assumption because soothsayers went out of style with Genghis Khan – but in a scenario where all the players are informed of the ultimate outcome of the game given their rational behavior, there is an incentive for all of the players to change their behavior in order to either change or maintain the predicted outcome. In other words, if you knew that tomorrow you would be killed by a falling icicle, you would change your behavior to avoid icicles at all costs. In doing so, you would prevent death by icicle. Therefore knowing the conclusion of a game can change the game considerably.

In the case of nuclear weapons development, if the U.N knows that Iran will never actually make the weapon they will relieve some of the pressure (which is costly to maintain) on the Iranian government. If Iran knows that it can’t win with its current method of play, the only fact that can be relied on is that Iran will not continue to play as it has been playing. In this way, all 90 players change their behavior and the outcome of the game.

However, it’s important to consider that this behavioral change will only happen if all the players accept that the outcome of the game their told at the beginning is the actual outcome of the game. Obviously, opposing players mistrust one another, because each benefit from the others misfortune. So, one excellent strategy for Iran would be to make their defeat the predictable outcome, thus renewing Iranian efforts and diminishing those of the U.N. Something like this happened during the Cold War, when U.S intelligence services systematically underestimated their own nuclear capabilities (resulting in consistently enormous growth) and Soviet intelligence services systematically did the opposite (resulting in stagnation). It is also why prepared people turn their watches five minutes fast.

 

 

 

 

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One thought on “Divination”

  1. That article from the New York Times is probably one of the longest and most interesting ones I have read in a long while.

    I like the point you make: Knowing the end of the game, the game could change considerably.
    If everyone could know about Bueno de Mesquita’s prediction and decided that everyone likes the outcome and wants to achieve that outcome, would every one do what needs to be done to get to the desired outcome faster? The potential though is for players to then deviate from this “middle ground approach” and try to use this knowledge to better themselves, somehow. I guess the best way to interpret Bueno de Mesquita’s prediction in the case of Iran, is to look at which players are preventing the natural outcome and of this group of players, who can be persuaded to change their actions to bring the natural outcome along faster. This has the potential to save certain groups a lot of money and a lot of time.

    It will be interesting to see if the prediction is correct. Will Iran be able to create civilian-nuclear technology and not end up creating a nuclear bomb?

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