Game Theory of Washington Political Parties
In the Atlantic’s article about the gridlock in Washington, Mohamed A. El-Erian describes the game theory behind the Democrat and Republican parties’ inability to collaborate. The government has many problems to deal with, and each party feels the need to establish oneself over the other. This is especially prevalent in the much-discussed fiscal debate, where the two solutions are on two opposite sides of the spectrum: revenue increases vs. spending cuts. The need for each party to be “the best” has created a game-like situation in which each participant not only wants to get the most out of the deal, but also see the other do badly.
El-Erian outlines the cycle in which the two parties attempt to make a deal:
- Parties declare that they want “grand bargains” to create growth, jobs, and prosperity
- Differences between opinions draw out and party members just begin to attack each other
- (Sometimes) a mini-bargain is settled on, especially in cases of deadlines
- Nothing major is achieved, creating anger between parties, as well as within the parties themselves.
Relating this back to the course, what is interesting is the inability for the two parties to settle on a decision. This can be attributed to the conditions of game theory in which negotiating ends up working out. When there is established initial power, incentives, access to information, and accountability enforcement (in the case of government), then there is a better bargaining environment. However, for the case of the Republicans and Democrats, we see that access to information is unequal. Some party members could be using specific statistics, while others are aware of different statistics from another source. This leads to bad accountability enforcement, as no one knows what is the truth and what is false. It is pretty common to hear politicians preaching information that no one can verify, or is proven wrong later. There is no simple way to enforce credibility. Another important attribute is that although we know that each party wants to be successful, specific goals and incentives are not aligned, so dominant strategies might not exist. Lastly, power is not fixed. For the parties, depending on the current situation with the president and other events, power is always changing. This shows how the parties are in environments where it is hard to negotiate.
Article: http://www.theatlantic.com/politics/archive/2013/01/how-game-theory-explains-washingtons-horrible-gridlock/267142/