Thank God You People Don’t Have The Nuclear Codes
Several weeks ago, FiveThirtyEight published an article discussing the game theory behind the recent nuclear standoff between the USA and North Korea. In that article, they primarily discuss the reasoning for both nations to posture; it improves their position within the game and increases the odds that they ultimately win. While their positions may be dangerous, they are not irrational positions to hold– as long as one isn’t averse to risk, it makes sense to engage in cheap talk to discourage your enemy from pushing further.
In that article, FiveThirtyEight also ran a game of their own; they told the reader to choose a number between 0 and 100. In this theoretical game, there would be two players who both choose; whoever chose the higher number would win $100. However, the loser’s number (the lower number) would be the odds that both players would have to burn $10,000 of their own money- i.e. if the numbers were 30 and 10, the player who chose 30 would win and both players would have a 10% chance of having to burn their money.
As seen in the graph below, 100 was the most common answer by far; players of this game appeared to be very willing to take risks. As calculated by FiveThirtyEight, players were on average losing $2000 per game. The statistical distribution is also very polarized, perhaps for good reason; if one is willing to risk burning $10,000, they may as well make sure they’ll win the $100. While these views may not reflect the actual actions that players would take if they had to play this game in real-life, it is rather concerning that so many would be willing to risk catastrophe for a relatively small gain.
At the same time, it isn’t surprising that players would choose this course of action. This scenario is very similar to the standard Prisoner’s Dilemma in game theory, as we discussed in class. This game can be simplified to a hawk-dove game; going low is choosing dove, while going high is choosing hawk. The payoffs are zero if both players are conservative, and only good for the hawk if one chooses dove. If both players choose hawk, however (a scenario very likely, judging by the graph of answers), then the consequences are disastrous for both.
https://fivethirtyeight.com/features/thank-god-you-people-dont-have-the-nuclear-codes/