Monday, October 14, 2013

Behavioural Game Theory & US Politics

For those of you unable to access U.S. census data and other resources due to the government shutdown there, this piece from Harvard Business Blog looks at the shutdown / debt ceiling debacle through a behavioural game theory lens. It is not particularly new information to close readers of US politics but the nice thing about game theory is the clarity it can offer by forcing you to explicitly delineate the incentive structures of the respective agents.

"Threatening to cause something really bad to happen in order to get your way is a negotiation tactic known as brinkmanship. Here’s a description from game theorist Thomas Schelling, in his 1960 classic The Strategy of ConflictIf I say “Row, or I’ll tip the boat over and drown us both,” you’ll say you don’t believe me. But if I rock the boat so that it may tip over, you’ll be more impressed".

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