Asymmetric games
As a favor for my friend, I agreed to delete the blog I posted on Sunday. The success of Global Brief is much more important than my vanity. However, there are two issues I raised in that blog which I must re-visit.
The first involves the hypocrisy of editorial boards. While I picked on the New York Times editorial board, I could have chosen from among countless editorial boards around the world and any number of editorials. Editorial boards do play an important role in monitoring and criticizing government policies. In many places they serve as the de facto opposition. My gripe with the New York Times has nothing to do with its specific topic. Rather, my complaint focused on the fact that the editorial board, like many others, offered no concrete solutions. Criticizing is easy. But to be useful and not petty, criticism should be accompanied by suggestions for addressing the problem.
The second involves asymmetry and collateral damage. All games are governed by rules, whether the game involves two individuals, two or more teams, two or more companies, or two or more countries; and whether the game involves athletic, scientific or cultural endeavors, market competition, trade or combat. If every player abides by the rules, even though each one might push the limits of the rules, game theory predicts that the winner will be determined by a mix of skills/talents, creativity/innovativeness, size/strength and luck.
However, there are occasions where at least one of the players chooses not to abide by the rules in order to increase the chances of her/his winning the game. In such circumstances we end up with asymmetric games, where the player not following the rules has the advantage. Game theory predicts that in asymmetric games, the odds of winning shift dramatically in favor of the player who does not follow the rules.
What should the other player(s) do? They have the following options.
They could continue playing by the rules, even though they realize that they are more likely to lose. But why would anyone choose to play to lose? Because there might be concern with the potential for collateral damage which might result if s/he decided to break the rules as well. Losing might entail a lower cost to society than the collateral damage resulting from trying to win.
A second option is to try to bribe the player who is cheating to go back to playing by the rules. But game theory makes it clear that anyone who cheats has no credibility when it comes to negotiating a compromise, especially one which involves a pay-off. Why should they not accept the bribe and soon afterwards go back to cheating? There is little downside to this type of behavior.
A third option is a version of the carrot and stick. The players abiding by the rules might try to entice the other player to negotiate by offering certain benefits; but at the same time threaten to retaliate with penalties if s/he doesn’t accept the offer and change her/his behavior.
Cheaters will participate in negotiations for two reasons. One is to test the resolve of the other players to follow through on their threats. The other is to buy time in case the other players are committed to following through. But the fear of collateral damage usually makes the threat of retaliation not credible. So let’s do the dance, buy some time, expose the weakness of the other side, and then go back to cheating.
The final option is to abandon the rules. In this case, the honest players must go beyond breaking the rules just to level the playing field once more. They must try to gain the asymmetric advantage. Collateral damage is inevitable if this option is selected. However, the costs of not choosing this option likely might prove to be much greater than the resulting collateral damage caused by choosing this option.
There is a fifth option. People cheat when the rules are not enforced. Thus, strict and credible enforcement of the rules reduce the degree of cheating. Enforcement is difficult enough for domestic laws and rules. No one has yet to figure out an effective system for enforcing rules between and among countries.
The opinions expressed in this blog are personal and do not reflect the views of either Global Brief or the Glendon School of Public and International Affairs.