Thursday, November 30, 2006

Stay the course, the iron fist, and game theory

One of the reasons I was able to let go of The Economist as its quality deteriorated was that I could turn to the many excellent blogs I read. Crooked Timber is among the very best, and here they trash the "we must not show we can be turned" by reference to game theoretic models (emphasis mine):
Crooked Timber: Reputations are made of …

....The point being that since game theory in general provides the analyst with so many opportunities to twist himself repeatedly up his own arse like a berserk Klein bottle, if a given real-world course of action appears to have nothing going for it other than a game-theoretic or strategic justification, it’s almost certainly a bad idea. Thus it is with that bastard child of deterrence, “credibility”.

... The idea is that the war is costing huge amounts of money and lives with no real prospect of success and a distinct danger that it is making things much worse. However, to do the logical thing would send the signal to our enemies that we will give up if fought to a pointless bloody standstill.Therefore, for strategic reasons, we must redouble our efforts, in order to send the signal to our enemies that we will fight implacably and mindlessly in any battle we happen to get into, forever, in order to dissuade them from attacking us in the first place.... What’s it like as a piece of game-theoretic reasoning?

Lousy. It is certainly true that one of the benefits of doing something stupid is that it saves you from having to spend money on maintaining your reputation as an idiot. However, is the reputation of an idiot really worth having?

It turns out that it can be proved by theorem that the answer is no. If the game of being a belligerent idiot with no sensible regard for one’s own welfare was worth the candle, in the sense of conferring benefits which outweighed the cost of gaining it, then everyone would want to get that reputation, whether they were genuinely an idiot or not. But if everyone wanted that reputation,then everyone would know that simply acting like an idiot didn’t mean that you were one, in which case it would be impossible to establish a reputation as an idiot in the first place. The point here is that it’s one of the more important things in game theory that a signal has to be a costly signal to be credible; like membership of the Modern Languages Association, a reputation in deterrence theory is something that is worth having, but not worth getting. People who use the word “signal” in this context (usually on the basis of a poorly understood or second-hand reading of Schelling) don’t always seem to realise that they are explicitly admitting that the costs of being in Iraq are greater than the benefits...

Friedman, another entity with a lost reputation, calls for a strategy of the persistent iron fist. That's a slightly different tactic. It's worth considering how that would turn out. Let us assume America used the "iron fist" approach. It's worked for many nations in the past. So ten years from now Iraq is "pacified". What does the world look like then? Well, we'd have Putin's Russia to the east - brutal and powerful. In the west we'd have ... well ... the same thing more or less. You don't get to the use the "iron fist" selectively. If it is used in Iraq, it is used at home, it is used with allies, it is used everywhere. Wouldn't that just be grand?

1 comment:

Anonymous said...

Very enlightening and beneficial to someone whose been out of the circuit for a long time.

- Kris