The Game Theory Behind Trump and North Korea
Link: http://www.businessinsider.com/what-game-theory-tells-us-about-trumps-north-korea-approach-2017-8
The above article discusses the game theoretic considerations of Trump and his behavior concerning North Korea. The article compares this behavior with that of Richard Nixon after being elected and beginning the Vietnam war. Nixon employed the infamous “Madman Theory,” in which he tried to appear as a madman, or more specifically, threatened a preemptive nuclear strike. The thinking behind this theory is that by appearing to be mad, or apparently acting against one’s own self interest, then one’s opponent might change their strategy to something more desirable (from the viewpoint of the madman). With regard to Trump, he has experience with this style of negotiating, but in the business world. Despite his many bankruptcies he is still a very wealthy individual, and uses this checkered past to his advantage in the corporate world.
However, unlike business, the global stakes are much higher in this game of nuclear brinkmanship. This story contains many of the game theoretic concepts we learned about in class. In this game, the players are Trump and North Korea, and the strategies are nuke, and don’t nuke. North Korea wants to threaten nuclear war only insofar as it gives them the capability of having the strategy to nuke. However, the payoff of having a nuclear war with the United States is extremely negative, as the US has the capability of completely annihilating North Korea. Trump’s strategy is a bit more nuanced then nuke or don’t nuke, but by threatening being aggressive, he is trying to increase the probability that he will go to war from the view of the North Koreans. If the North Koreans think he might actually go nuclear, it is in their best interest to stop being aggressive in order to avoid nuclear annihilation, which could lead to some sort of treaty. This is essentially an asymmetric information game, where Trump is trying to hide his true intentions in order get a favorable outcome. Let us hope he doesn’t lose.