Massachusetts Daily Collegian

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A free and responsible press serving the UMass community since 1890

Massachusetts Daily Collegian

A free and responsible press serving the UMass community since 1890

Massachusetts Daily Collegian

Using “game theory” to understand political brinkmanship

Flickr/Celeste Hodges

Although Congress has managed to avoid the so-called “fiscal cliff” through its passage of the 11th hour American Taxpayer Relief Act of 2012, the process of doing so was far from idyllic. The laggard negotiations exemplified the counterproductive bipolarity that plagues Congress, causing many to question whether Congress is in fact prioritizing the well-being of the American public or its own political agenda of competition and divisive ideologies.

The simple fact is that the recent fiscal cliff debates are only the latest chapter in a long history of political brinkmanship which dates back to the Cold War. These methods of driving dangerous events closer and closer to the brink of certain disaster has been used on many occasions in international politics, foreign policy, and labor relations and negotiations in an attempt to force an opposing side to concede. By definition, these types of negotiations are based upon two primary premises; each party stands to gain a comparative advantage in the results of the negotiation if the other party concedes and neither party is willing to accept the harm of “going over the cliff” but uses an ostensible escalation of threats and other debate tactics to support a guise of reckless adamancy.

Understanding the causes of this precarious political posturing requires an understanding of the economics of game theory, which, in part, attempts to explain how individuals make decisions when faced with an unknown influence of another’s choice upon the outcome of their decision.

As illustrated in Dr. Nancy Folbre’s recent article “The Cliff Game,” Congress’ propensity to engage in brinkmanship debate tactics is eerily similar to a “game of chicken,” which was made famous by the film “Rebel Without a Cause” (1955). In the film, Jim Stark (James Dean) is pressured into participating in a daring game called “chickie run” in which two participants race stolen cars towards the edge of a cliff; the first to jump out of the car before going over the cliff is deemed the “chicken” and is humiliated.

This scenario provides an excellent example of the role of economic game theory in political debate. Faced with the impending fiscal cliff, Congress chose to engage in a game of political “chicken,” risking an impending recession should they fail to strike a deal for the advancement of their own political and ideological agendas.

Game theory is based on the analysis of how individuals make choices when the possible outcome of their decision is determined by the choices of another external “player.” This model accurately reflects the negotiation tactics of government officials, who must make decisions about whether or not they will choose to negotiate in the face of impending economic disaster. Their choice of whether to give in to the other party’s wishes, resulting in the aversion of an another economic recession, or not give in to their wishes, risking a recession, is based upon the possible outcomes of their actions as determined by the actions of the other party.

This can be visualized through the chart, which illustrates the two parties, Democrats and Republicans, and the results of each of their two possible choices, with respect to the fiscal cliff debate and subsequent risks. For the sake of simplicity, I will limit their choices to “cooperate,” which entails the party giving in to the demands so to speak of the other party in exchange for certainty that the fiscal cliff is averted while suffering a loss of status from being seen as “losing,” and “do not cooperate,” which entails the party refusing to give in to the other party’s demands.

The chart illustrates the dependence of the outcome of one party’s choice lies on the other party’s decision. If the Democrats choose to cooperate, no matter what the outcome is, they will not be fully satisfied with the deal that is met. Likewise, if the Republicans choose to cooperate, not matter the outcome due to the course of action taken by the Democrats, they will be unsatisfied with the deal. Both parties stand a chance of being fully satisfied with the resulting deal if they refuse to cooperate. As a result, both parties, acting to promote their own political interest, will choose not to cooperate.

This analysis explains why brinkmanship has become so popular in modern politics; faced with the option of negotiating or holding out for the other party to give in, both parties choose to take the risk associated with postponing negotiation with the hopes of forcing the opposition to concede out of fear. In fact, according to New York Times journalist Charles M. Blow in his article “Cliff After Cliff,” he writes that “unfortunately, we are most likely in store for a never-ending series of cliffs for our economy, our government and indeed our country. Soon we’ll have to deal with the sequester, a debt-ceiling extension and possibly a budget, all of which hold the specter of revisiting the unresolvable conflicts and intransigence of the fiscal cliff.”

If recent events serve as an inclination of how future debates will be approached strategically and ideologically, it appears that our very system of governance has fallen into the grasp of intransigent and ardent self-interest; should the current political climate remain unchanged, the politics of brinkmanship will persist indefinitely, resulting in many more “fiscal cliffs” to come. The economic theory behind this trend supports the notion that until the possible outcomes of parties choosing to compromise are more positive to the party’s ideological and political goals than the outcome of engaging in brinkmanship and poor negotiation practices, political brinkmanship will persist indefinitely, bringing with it the continued and persistent risk that someday, the “cliff” will not be averted.

Makai A. McClintock is a Collegian correspondent. He can be reached at [email protected].

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    David Hunt 1990Mar 9, 2013 at 8:32 am

    The problem with compromise with Leftists like Barackus Rex is that, after meeting you halfway, they then reset the goalposts and define that as the new “extreme Right” position, and demand compromise again.

  • M

    MikeMar 7, 2013 at 8:39 am

    Way to oversimply a very complex situation based upon a few classes of Econ 309.