Today's vocabulary term is: game theory

Speaking as someone who received a modicum of academic training as an economist, let me be the first person to concede that most of the professional writing by the current generation of economists is... well... bullshit. But a certain branch of the discipline has occupied my thoughts over the past few days for its apparently versatile applicability to the current crop of news stories, and that branch is called game theory. The idea behind game theory is that a system with a limited number of actors is less suited to graphical, "supply-and-demand" analyses than more densely populated ones, because the starting conditions faced by any one actor are influenced by whatever decisions the others have already made.

If, for example, Delta Air Lines slashes its fares, the subsequent pricing decisions made by Northwest Airlines will have to take this action into account, raising the prospect of a multi-stage sequence of strategic actions that don't fit neatly into slice-in-time pictures with intersecting curves revealing some magic point of equilibrium. Instead the various strategies that will be adopted by the various actors must be mapped out, one move at a time, to best inform our prediction of what another actor will do in response, and the "equilibrium" in such cases won't be a temporal answer, but rather a description of the considerations that will produce the most stable set of strategies, regardless of whether those strategies are in the actors' best interests. And the thing about that process is, we can apply it to the situation in Gaza; we can apply it to the wave of republican retirements in the Senate; we can apply it to Barack Obama's approach to engineering an economic recovery; we can apply it to the state of the Minnesota recount.

In Gaza, the Israelis face a set of strategic decisions that are such classic examples of game theory modeling that they may one day be incorporated into textbooks on the subject as a shining example: If the Israeli government pursues every last militant in Gaza, regardless of the collateral bloodshed that results, the sub-community of nations that has already registered its outrage will howl even louder, but the Israeli military will surely get its men (as it nearly always does). If, on the other hand, Israel ceases its operations in Gaza before it is satisfied that it has rooted out everyone with whom it finds disfavor, it runs the risk of leaving some of these people intact to commit future acts of violence against Israel but--and here's the rub--it gains nothing in the eyes of all those disapproving nations. They'll disapprove of the institution of the operations in the first place. They'll disapprove of the military imbalance. Most of them will disapprove of Israel, period. At the very least, it seems reasonable to presume that no government on earth is going to normalize its relations if the Israeli military stops, now.

What does game theory predict? It predicts that continuing the operation is a so-called "dominant strategy"--one by which the actor in question loses nothing but gains more than nothing, and which will therefore be adopted with near certainty, assuming that the actor in question is smart enough to have figured all of this out for itself. Moreover, this awareness also raises the prospect of an obvious course of action for the United States in the matter, too: Unless the "milk" of this particular military intrigue can be "soured" by Israel's principal benefactor, both militarily and diplomatically, the intrigue itself will be seen in the eyes of the persons who ordered it as an action without downside consequences--thus raising the prospect of even more unilateral bloodshed in the future.

Back at home, the country is in the grip of a wave of Republican senatorial resignations, the likes of which hasn't been seen since the early days of the Roosevelt Administration. Here the game theoretician looks not so much at the resignations themselves, but at the likely pattern of floor-votes presaged by the senate's current makeup. A filibuster-proof majority for the Democrats, as it happens, isn't nearly as important as most outsiders (including journalists) seem to think it is: The moderate Republicans can, and presumably will, vote against certain filibusters because they quietly support whatever legislation is being considered, then vote against the legislation itself if they feel they need to appease the RSCC and general party leadership. Conservative Democrats, meanwhile, can vote against the filibuster and against the bill, too, since their votes are more crucial in securing the first outcome than the second--thus fortifying their chances of reelection by conservative constituencies.

All of this means a high likelihood of significant legislation being passed by the next congress, and with it a game-theoretician's dream scenario for predicting large-scale strategic behavior on the part of the minority party. If a Republican senator opposes these legislative efforts hammer-and-tong, especially if they represent a purple state, their opposition is far more likely to redound to their own detriment than under normal (say, 1993-era) circumstances--since the country is in so big a mess already that few persuadable voters are likely to believe that any Democratic policy initiatives are likely to make matters any worse. If instead the Republican senator in question chooses to ascent to whatever is being proposed, he ends up either supporting something he disagrees with, facing a primary fight for his own reelection, or both. And since very few stupid people make it as far as the United States Senate (though in fairness it does occasionally happen), the writing on the wall for Republicans facing difficult reelection campaigns in purple states is that now might be a good time to announce retirement, as a dominant strategy permitting a far more flexible and centrist stance on any number of genuinely beneficial initiatives likely to come from thew new Administration, without actually lowering the chances of breezy reelection, because they were already zero.

President-elect Obama, of course, knows all of the same strategic maneuvers and their likely outcomes--not least because he hails most recently from the United States Senate himself. Accordingly, his own approach to engineering economic recovery has been surprisingly centrist, some might even say conservative (though presumably with a small "c" and not a capital one), since he knows full-well that any spending he submits to congress is far, far more likely to get bigger than it is to get smaller, by the time it comes back to him. By choosing the dominant strategy of shilling a relatively unambitious package of new initiatives, featuring relatively targeted and quotidian solutions to our nation's ills, he spares himself the bulk of an otherwise messy fight with the few remaining Mitch McConnell's of the world, while at the same time not really limiting the depth or breadth of the remedy.

Which only leaves the question of whether he have the votes of fifty-eight senators or fifty-nine, with the answer dependent, of course, on the eventual outcome of outgoing Senator Norm Coleman's faint-flickering gambit to have the result of Minnesota's closely contested recount overturned in civil court. The fact that courts almost never overturn certified election results apparently hasn't fazed Mr. Coleman all that much, as he seems as intent as ever to prove that any number of curiously one-sided incidents and judgment calls have robbed him of his election-night lead. In what has been dubbed by some people as a "kitchen sink" brief, Coleman is alleging that he has been unilaterally injured by double-counting, under-counting, wrongful inclusion of absentee ballots, wrongful exclusion of absentee ballots, and, to top it all off, a long litany of individual decisions by the canvassing board that seem in his mind curiously to have no offsetting counterparts on the Franken side of the ledger. Most mainstream columnists, to say nothing of a sizable plurality of Minnesotans, believe the challenge to be rubbish and want Coleman to give it up. But what would a game theoretician say?

A game theoretician would predict that Coleman would continue to pursue the court challenge for as long as he deems the benefit to outweigh the costs, and then (and only then) give it up. But there's a wrinkle here: Ordinarily, the costs of such an obviously whiny and unwarranted suit would be measured in decreased future electability, but in this case we're talking about a guy who lost one statewide race to a wrestler, won one against a dead man, and now appears to have lost to a comedian. The dominant strategy for Mr. Coleman, in other words, arises from the fact that he is completely and utterly washed up, regardless of whether he chooses now to bow-out gracefully or to fight to the ultimate, bitter end. He has nothing to lose. Accordingly, he's playing this precisely as someone who has nothing to lose--filing every possible objection and not bothering too much to justify the apparent contradictions that those various objections represent. To a game theoretician this is a perfectly rational course of action for him (provided the money holds out). If there is a 0.1% chance that he will still prevail, that's still 0.1% higher than his chances of ever holding statewide office in the future.

Oh and there's one other thing worth mentioning under the general heading of game theory as it applies to political realities at home and abroad: If dominant strategies continue to play as big and resurgent a role as they have over the past few weeks in shaping our national and international destiny, only good things can come of it. After all, the dominant strategy for a Republican Administration facing the need to choose a hurricane response wouldn't have been to let people drown, and a dominant strategy after September 11th would most assuredly NOT have been to invade Iraq.

Dave O'Gorman
("The Key Grip")
Gainesville, Florida

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After fifth-pile, Franken +225

UPDATE: 11:02PM Sunday, Jan. 4: CNN is reporting that the Minnesota State Canvassing Board will certify Al Franken the winner of the 2008 statewide election to United States Senate, defeating incumbent Norm Coleman. Mr. Coleman is widely expected to formally challenge the result in court, about which much more below:

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Norm Coleman and his campaign lawyers are nothing if not doggedly persistent. Over the past two weeks, ever since Al Franken took the lead in the recount for Minnesota's 2008 Senate race,t they've tried floating a specious story about Franken votes being found in somebody's trunk, they've tried claiming that 110 or so ballots were actually counted twice, they've tried objecting to the counting of 1,350 absentee ballots that the county election officials felt had been improperly rejected the first time around, and, finally, they tried to have those 1,350 ballots supplemented with nearly 700 additional absentee ballots that a grand-total of nobody else on earth thought should be included. The bad news is that these antics are par for the course with Republicans; the good news is that they haven't gotten away with it.

Today, as a blizzard loomed with ominously impeccable dramatic timing, the Secretary of State of Minnesota opened the 955 ballots that had survived a preposterous "everyone must agree" standard, out of the 1,350 that seem to have been improperly rejected, and at the end of that count Al Franken had widened his lead to 225 votes. As small as this margin is, the significance of the number cannot be over-stated, since it reduces to zero the possibility that Mr. Coleman could reverse his deficit if he prevailed on both court challenges pertaining to the supposed double-voting and the supposedly "found" ballots. It also reduces to very nearly zero the possibility that Senator Coleman could reverse the deficit with the inclusion of all 700 of the ballots that he preposterously claims for inclusion, since even those are sure to contain a significant tally for Franken. At this point, the only remaining path for Coleman is to challenge the election in court--but in the absence of a clear and substantial case of either negligence or malfeasance by the state canvassing board, the likelihood of a court overturn of this result is very, very small indeed.

What happens next is anyone's guess: Mr. Coleman is within his rights to challenge a significant number of the ballots that were informally tallied for Franken this afternoon, when they are formally added to the count at Monday's meeting of the canvassing board. He is within his right to make further "emergency" appeals on further, specific procedural grounds, to the Minnesota state supreme court. He is also within his right to challenge. Another possibility is that Mr. Coleman could concede the outcome, based on today's results (which were far more conclusively pro-Franken than even the most optimistic projections that had been reported before the absentee ballots were opened). It would seem that whether Coleman chooses to fight on or concede will come down to how today's events are relayed to him by his closest advisers. If they report the matter as a 90-10 proposition, knowing Mr. Coleman personally as I am unfortunate enough to do, it seems unlikely that he will choose to concede. If they report the current state of the matter as a 99-1 proposition, he may need another day.

If I learned one thing from a seven-and-a-half year stint in economic development in the state of Minnesota, it's that assuming Norm Coleman will show even the tiniest scrap of dignity or class is a sucker bet. But on the other hand, George Allen didn't show a lot of class when he called a reporter "macaca," either, and after an understandably protracted interval of self-reflection and personal anguish, he eventually emerged from his home in Virginia and did the right thing by conceding his 2006 senate contest to Jim Webb. If the pattern holds, Mr. Coleman has for himself the perfect opening to find that same shred of career-salvaging graciousness, both in today's result and in its timing: He can spend all day tomorrow very conspicuously saying nothing public to anyone, and then on Monday he can concede.

Stranger things have happened. Indeed, stranger things have happened in this election.

Dave O'Gorman
("The Key Grip")
Gainesville, Florida
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Breaking News: Franken Team May Fumble

For several days now, the only way that the Al Franken campaign could lose the Minnesota Senate Race has been if they beat themselves. With a 46-vote lead after all challenged ballots had been reviewed by the state canvassing board, and a State Supreme Court decision rejecting the Coleman campaign's preposterous allegation that there were over 100 double-counted ballots, all that has remained is a pile of approximately 1,600 absentee ballots which may or may not have been improperly rejected. Since before the holidays these have been the only ballots left on the table: Once those ballots had been accounted for, there wouldn't be anything left to count. Unfortunately for Mr. Franken, the Supreme Court ruled that, for each of these 1,600 ballots, both campaigns and the relevant county administration must agree to count it, and that if any one of those three parties didn't agree, the voter in question would be notified and would have to appeal the rejection of his ballot, in writing. And why is that bad news for Franken?

Because the disaggregation of the review process means that the Franken people are uncoordinated in their approach to challenging or allowing ballots. In Republican-leaning areas, at least so far yesterday and today, the Franken campaign has approved essentially all of the absentee ballots, in keeping with Franken's very consistent message that every vote should be counted. In Democratic strongholds, by contrast, the Coleman people are under no such obligation to principles or ethics, and as such they have no particular incentive to allow any absentee ballots at all. In consequence, what may very well happen is that the Franken campaign, striving for a consistent, politically salable, and above all correct position in the matter, could end up giving away its roughly 50-vote lead. It could well end up that only absentee ballots cast in Republican areas of the state ever get counted at all, and that these could very well reverse Mr. Franken's lead.

The one ray of sunlight in this matter is that most of the 1,600 absentees are located in Democratic areas, anyway, and even in Republican-leaning parts of the state, the absentees seem to be slightly favoring Mr. Franken. The Uptake is covering the story live, including simulcasts of all press conferences, etc., and including the absentees that have already been agreed upon by all three necessary entities, at the moment Mr. Franken's lead is unofficially at fifty votes--up four from the start of this process. Still, there have been 18 ballots presented in Republican-leaning Sherburne County, and 15 of those have been agreed upon by all three entities. That's an awfully small sample to work with, but it does raise some grave concerns about the extent to which Mr. Franken's principled stand could cost him the whole race.

Dave O'Gorman
("The Key Grip")
Gainesville, Florida

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