Game Theory

[Tunnelcat]

Since most of us are gamers here, I thought this Businessweek article might be of interest because of all the debt ceiling arguments we've been having. The politicians are all playing a dangerous game and who wins depends on whether a particular politician's goal is cooperation or noncooperation during any negotiations. I now see how the Republicans, the tea party, the Democrats and Obama played the game and why it came out the way it did.

The Case for Caving

[Firewheel]

You seem to have a different Game Theory in mind than how the term is usually used online.

[Jeff250]

The problem with game theory is that it usually assumes that players are both selfish and rational, whereas in politics, only the former is guaranteed to apply.

[Tunnelcat]

Yeah, but you still have the cooperation and noncooperation problem. If one party wants to get things done by not cooperating with the other side, either nothing gets done, a stalemate, or one side caves in and other wins. If both parties negotiate cooperatively, they both may not get all they want, but they may feel like they accomplished something.

Liberals do things like women when they work with others, they assume the other side wants to negotiate cooperatively. Conservatives, on the other hand, are a little like men and seem to relish noncooperation because they know that the liberals they're working against want cooperation and might be more likely to cave in out of frustration and allow them to win what they want. It's the fight they like, not the negotiations themselves. The rules of the game are different for both parties.

Now boys, when you play in a team game, do you cooperate with each other to win the goal, or does someone invariably go rogue and cheat because they like to fight and win at any cost? Women, of course, like to cooperate with each other to achieve their goals. Not always, but usually.

[Jeff250]

That sounds like the two player game prisoner's dilemma.

In iterated prisoner's dilemma (playing the prisoner's dilemma for multiple rounds between the same two players), genetic algorithms found that tit-for-tat with forgiveness (originally cooperating, then doing whatever the other player did last round with sometimes forgiving to avoid infinite loops of noncooperation) was empirically best strategy. The interesting thing about this game is that for single-round prisoner's dilemma, the dominant strategy is to always defect, so adding multiple rounds creates incentive to cooperate.

[Tunnelcat]

Interesting. So using the strategy called out in prisoner's dilemma, would Congress's farming out the debt talks to a smaller super-committee, which will probably go for several rounds before reaching some decision, ultimately lead to cooperation and an amicable decision? But would that work if one side hasn't been tactically strong enough to punish the other in the past OR have the temerity to force the other to suffer the consequences of failure?

[Jeff250]

So as you touch on, something that isn't captured well by prisoner's dilemma is the gradient of possible strategies between cooperate and defect that exist in this situation--you could "sort of cooperate" or "barely cooperate." You might be able to enhance the game (or perhaps such a game already exists) to include this, so ordinary prisoner's dilemma is only a simple approximation of this. It also doesn't capture imbalances in power where one prisoner might have an advantage over the other or more to gain/lose, but you might just tweak the payoff matrix to account for this. One advantage of a super-committee is that we may be seeing more rational, less emotional decisions from it versus the rest of Congress's "mob rule." In this case, hopefully we see more cooperation.

[Tunnelcat]

I think even the super-committee may have flaws. Every Republican selected for the committee has signed the Grover Norquist No Tax Increase Pledge, so raising taxes is already off the table in any case. They're already entering negotiations with a non-cooperative stance. The only thing that might be a little fluid is if they can "disguise" their tax cuts as something else, like closing loopholes or cutting deductions. That's the unknown here, whether they might comprise, or cooperate in a fashion, to get around their pledge.

Now the Dems are entering the negotiations with no such pledge and still with the intent that they will somehow be able to change their opponent's minds, even knowing the other side has signed this pledge and is going to stick to it. But they're still forging ahead anyway, assuming they might be able to eke some cooperation from opponents. Unfortunately, most Democrats just aren't non-cooperative negotiators by nature, but they're still wishful thinkers and that's where they can be taken advantage of in any game. I'm guessing how this plays out will essentially be the same as before, given the selections for members from the Dems side. They're all cooperative players, period. I bet that we'll get the same result as we did from Congress. One side's already dug in, and advertising it, the other side still hopes against hope to change some minds. Same old, same old.

Now if they'd selected more likely-to-be-non-cooperative liberal Democratic players like Bernie Sanders, Al Franken (unlikely, too junior) or Peter Defazio, we might see a whole different game. It would be more interesting to see what the pain level would be before a solution would be reached. Who would blink then?

[Heretic]

Does any one else here find this laughable. It's all the repubs fault because they don't want to raise taxes but all the dems want to raise taxes. John Kerry and Patty Murray are both tax and spend democrats and have no intention of doing other wise. Max Baucus might be considered a centrist but he still placed 82 earmarks in to bills in 2010. Chris Van Hollen, Xavier Becerra and James Clyburn from the house side are known for protecting entitlements and will want to raise taxes to do it. all are uncompromising when it comes to taxing and spending.

[CUDA]

The only thing that might be a little fluid is if they can "disguise" their tax cuts as something else, like closing loopholes or cutting deductions. That's the unknown here, whether they might comprise, or cooperate in a fashion, to get around their pledge.

closing the loop holes is not "trying to get around their pledge" closing the loop hole is preventing people from getting around the intend of the law.

Now the Dems are entering the negotiations with no such pledge and still with the intent that they will somehow be able to change their opponent's minds,

AHAHAH[snip]
[Don't spam/create horizontal scrollbars. --Jeff]

Thx TC I needed that Laugh

Does any one else here find this laughable. It's all the repubs fault because they don't want to raise taxes but all the dems want to raise taxes.

hysterically

[Spidey]

I think even the super-committee may have flaws. Every Republican selected for the committee has signed the Grover Norquist No Tax Increase Pledge, so raising taxes is already off the table in any case.

That’s funny, I could have sworn the Super committee was formed to find spending cuts only.

[callmeslick]

I think even the super-committee may have flaws. Every Republican selected for the committee has signed the Grover Norquist No Tax Increase Pledge, so raising taxes is already off the table in any case.

That’s funny, I could have sworn the Super committee was formed to find spending cuts only.

sorry, but the legislation stated the goal as finding further DEFICIT REDUCTION. It said so clearly.

[Spidey]

Prove it.

[Tunnelcat]

CUDA, I clearly know where the Dems stand, spend other people's money whenever they can, whether or not it's for the people's benefit. That's what they've always done. I also accept that they will have to cut some of that spending to reduce the deficit. HOWEVER, they haven't signed any damned pledge stating that they will NEVER cut spending! In fact, all they've been doing is caving in to conservative demands when pushed up against a rock during these negotiations like spineless cowards.

Now the Republicans HAVE signed such a pledge, which to me means they will NOT negotiate, AT ALL, any kind of revenue hikes. Kind of defeats the purpose of having deficit reduction talks in the first place, when clearly some revenue generation will be required to solve the crisis.

I've also seen the negotiations being described as for "Deficit Reduction" Spidey. What else would you call it? "Screw the people who depend on government entitlements and keep giving the wealthy tax breaks" negotiations?

http://thehill.com/blogs/congress-blog/ ... e-sunlight

As Congress prepares to debate another massive deficit-reduction package this fall, it should follow Lincoln’s foundational principle. It can do so by ensuring that the deliberations of the bicameral “supercommittee,” created to accomplish this task, be conducted in open session under the watchful eye of the American people.

[callmeslick]

Prove it.

from the bill itself--page 52, I believe:

(1) ESTABLISHMENT.—There is established a
2 joint select committee of Congress to be known as
3 the ‘‘Joint Select Committee on Deficit Reduction’’.
4 (2) GOAL.—The goal of the joint committee
5 shall be to reduce the deficit by at least
6 $1,500,000,000,000 over the period of fiscal years
7 2012 to 2021.



I put the red color in, to save you searching for your reading glasses. Carry on with your specious argument.

[Spidey]

Ok, My bad, I didn’t mean to prove the wording of the bill, I should have said the mechanism to said end.

“The task of the committee is to find at least $1.2 trillion in cuts (over the next decade) by November 23 and present their plan to the Congress. That plan will then pass or fail on an “up or down” vote with no chance for either body to amend the committee’s recommendations. If the bill fails to pass by December 23, a “trigger” automatically cuts both military budgets and discretionary budgets, but (except for a modest 2% cut in Medicare, to be levied on the providers through decreased reimbursements) leaves Medicare and Social Security alone.”

[callmeslick]

Still, Spidey, that task, by legislative mandate could be to find deficit reductions of that amount, including raising revenue in the mix. It is a shame that some legislators got themselves locked in with a stupid no-tax pledge. There is a real danger inherent in rigidity. Therein, by the way, lies my problem with a Balanced Budget amendment. You really don't want a balanced budget. You want a budget that remains in balance over time, but when the economy is bad, the need for spending is highest, and visa versa. So, what you really need is a plan that creates surplus in good economic times and spends the surplus on governmental needs like unemployment and welfare when times are bad.

[Spidey]

I have never been a big advocate of a balanced budget amendment, sounds great in theory…but…

Yea, the bill seems to leave the methods un-defined…so that in theory, means the government could sell off assets, or other methods as well…which also ain’t gonna happen. Because I don’t think congress could have an original idea to save their lives.