Game Theory: The Answer to All Conflicts?
Do you remember the scene towards the end of the movie Sherlock Holmes: A Game of Shadows where Professor Moriarty and Holmes play a “mind game” wherein they predict the outcome of their fight? Without actually physically fighting, they know what will become of the situation. It seems at first that Holmes, already severely injured from his earlier encounters with Professor Moriarty, has no chance of winning. However, Holmes plays an unpredicted move of throwing himself along with Professor Moriarty into the depths of the waterfall. This sudden change in the outcome of the game is due to Professor Moriarty’s lack of information: he was not aware that Holmes had in his possession a device that would allow him to survive the engulfing forces of the waterfall.
There is a man who uses similar abilities to predict the outcome of such games to his and his affiliates’ advantage. His name is Bruce Bueno de Mesquita, a professor at New York University and a political scientist. Bruce uses Game Theory to predict the outcomes of many different kinds of situations such as diplomatic developments, auctions, negotiations, or arms conflicts. Bruce has already been very successful in many of his predictions.
“In May 2010 he predicted that Egypt’s president, Hosni Mubarak, would fall from power within a year. Nine months later Mr Mubarak fled Cairo amid massive street protests. In February 2008 Mr Bueno de Mesquita predicted that Pakistan’s president, Pervez Musharraf, would leave office by the end of summer. He was gone before September. Five years before the death of Iran’s Ayatollah Khomeini in 1989, Mr Bueno de Mesquita correctly named his successor, and, since then, has made hundreds of prescient forecasts as a consultant both to foreign governments and to America’s State Department, Pentagon and intelligence agencies. What is the secret of his success? “I don’t have insights—the game does,” he says.
In such cases, the Game Theory was applied beyond the limits of economics. Often times, the Game Theory is used to maximize (or minimize in case of penalties) the payoff of the player of interest. It turns out that Game Theory can be used in a way that may potentially be the answer to preventing conflict, be it between individuals, companies, or nations.
For example, in a negotiation between to large firms, a mediator has to work out the facts and data about both companies to decide on the terms of agreement that are acceptable for both parties. However, it is not uncommon for a negotiation in which the mediator is not trusted occurs. The reason lies in the fact that the information from both companies must remain a secret to the opposing party, because It is always a disadvantage for a player to disclose the limits of his/her values to the competing players in an auction or a negotiation. However, a human mediator may very well be tempted to violate this golden rule in the face of a bribe or advancements from either company.
Going back to the dilemma of a distrusted mediator, one suggestion is to use a computer model, or “mediation machines”, according to Dr. Ponsatí, head of the Institute of Economic Analysis at the Autonomous University of Barcelona. Each player assigns secret values to the assets that they desire to acquire in accordance with how badly they want it, and the machine spits out the cold-cut results/payoffs of the game and the terms of agreement to which all the players must undeniably submit.
This is a novel idea in that it saves all parties from having to endure the conflict that occurs in the process of reaching the agreement. To expand this idea, the method could be applied to international conflicts that often result in an arms race or even bloodshed.
Beyond the scope of economics, the Game Theory presents a novel way of conflict mediation. Its applicability may be something that needs more data to be proven, but the idea that a system of logic can resolve issues that have been plaguing the human race as long as the beginning of its history is certainly one that is hopeful and intrinsically good.
-Andy
Works Cited
The Economist. “Game Theory in Practice.” The Economist. The Economist Newspaper, 03 Sept. 2011. Web. 17 Sept. 2012. <http://www.economist.com/node/21527025>.