25 August 2011

The only thing that will redeem mankind is cooperation.

Bertrand Russell

There is a famous problem in game theory called the prisoner’s dilemma. The basic formulation is that the police have apprehended a pair of suspects for a crime, and are interrogating them in separate rooms. They don’t have enough evidence to convict.

They tell the suspects that :

If one prisoner rats out his partner, and the other doesn’t: the guy who talked goes free, the guy who didn’t gets 5 years

Both rat out each other: Both get three years

Both silent: Both get one year

In the classic version of the prisoner’s dilemma, it is always a better strategy to talk to the police (which directly contradicts what you should do in real life). This is because, if the other guy talked to the police, you are better off talking to the police (3 years instead of 5 years), and if the other guy didn’t talk to the police, you are also better off (no jail time instead of a year in jail).

However, the strategy of always turning on your cohort is only optimal if there is just one time that you face the decision. Scientists later extended the game so that the prisoners would have to make the decision multiple times. Each player would know the history of whether the other prisoner was hostile or cooperative, and could adjust their strategy accordingly.

When the prisoner’s dilemma was extended to imagine unlimited turns, a new strategy was found to be optimal called the tit for tat strategy. In the tit for tat strategy, you start out by being nice to the other guy, and then, in the future, you do whatever the other guy just did. So, you start out nice, and if the other guy is nice, then next time you are nice also. If the other guy ever screws you, you screw him next time.

Politics in the Unites States has some major similarities to the prisoner’s dilemma. There are two big political parties. By cooperating, they are able to compromise and enact laws that somewhat satisfy both sides. However, as we have recently seen in the debt ceiling debacle, one party can screw over the other and get its way completely.

Some may say that the debt ceiling debacle is just another example of the republicans and democrats arguing over policy, and doesn’t represent the republicans completely screwing the democrats any more than any other political issue. I strongly disagree. I don’t think there has been any other example in history when one political party threatened to stop paying social security checks unless it got everything it wanted, with no possibility of compromise or negotiation.

At this point, the proper game theory response by the democrats is to completely screw the republicans.

This is a dangerous situation for a number of reasons. The end result of the debt ceiling crisis was the creation of a huge lack of confidence in the US legislative and political system that led to a downgrade in the US credit rating. When the democrats respond, the lack of confidence in the political system will erode even further.

There are major structural problems when the two political parties become obsessed with posturing over their positions, and are completely unable to join together to enact legislation. We have a number of huge challenges that our legislators will need to tackle over the next ten years, including fixing the health care and social security systems, dealing with climate change, immigration, and our public education system. There is no way that the democratic and republican parties can solve these major issues as they are now.

So, for the sake of the future of the Unites States, let’s hope the democrats haven’t heard of game theory. Let’s hope that they don’t come back and try to screw the republicans like they just got screwed. Let’s hope that the cycle of holding the country hostage until the other side caves is cut extremely short. Let’s hope that our politicians learn to cooperate and do what we elected them for.