Network Theory and Game Theory in Alliances
In a study by Matthew Jackson and Stephen Nei of Stanford Univeristy, the two men used network theory and game theory to analyze the stability of a network of countries that form a military coalition. They based their findings on networks that only consist of military links and networks that consist of both military and trade links. In their study, they wanted to see if their data reflected real data of then trend of wars in the late 19th century to the end of the 20th century. Furthermore, they tried to see if there exists a stable network where there is no country that is vulnerable to a successful attack by others and no country that can change alliances in a way that makes an attack viable. Looking at networks with countries that form military coalitions, they found that there is no stable network except for the empty network with no links. In this network, they reasoned that the pressure to ensure that all alliances have a purpose make the network unstable since it conflicted with stability against the formation of new alliance. This discovery of instability correlated with the constantly shifting structures and recurring war that occurred between 1820 and 1859 which led to many wars between each possible pair of countries.
After seeing this, they tried to find a way to explain the decrease in wars between each possible pair of countries between 1960 and 2000. They were able to find the reason by analyzing the second type of networks in their study which consisted of both military links and trade links. From these networks, they found that that existence of trade relations increase the stability of the network but still do not create the stable network they were trying to find. They believe that this was a reasonable conclusion since trade provides a reason to maintain an alliance and also reduces the incentive to attack another country as the conflict will disrupt trade. Furthermore, they come to the conclusion that another factor for the decrease in wars and increase in stability of alliances in the latter half of the 20th century is the existence of nuclear weaponry. However, they cannot say that this is the main cause due to the fact that only a few countries have access to nuclear weapons.
This article relates to the topics of network theory and game theory we learned in class since it applies those topics to the alliances between nations and how wars could result from them. The networks Jackson and Nei observed were networks that consisted of friend-enemy relationships between countries. Their study used these networks which showed which countries were friendly with each other due to their trade relations and military alliances to observe the structural stability of these networks and why they lead to conflicts. They then used game theory to explain the reasons why countries would keep or break an alliance by analyzing the costs and benefits of making those decisions. By looking at the payoffs of the decisions countries make when dealing with their alliances with other countries, Jackson and Nei were able to make conclusions on the links between countries and how they could lead to or prevent conflicts.