The changing dynamics of international relations warrant a revisit to a rather forgotten but still valid theory of international relations: game theory which was once at the centre of strategic community thought and planning during the Cold War. Game theory analyzes the interaction of players or stakeholders during certain transactions/scenarios. In international relations, this interaction is among nation-states.
A theory is a scientifically acceptable general principle or body of principles offered to explain phenomena. (Merriam Webster) Game theory is the branch of mathematics concerned with decision making in rational social interactions. Von Neumann, a Hungarian Mathematician coined the term in his seminal work “Theory of Games and Economic Behaviour”.
The cold war era witnessed the ascendance of game theoretic models. These models were used to evaluate different policy options for nuclear strategy/crisis management such as the Cuban Missile crisis in October 1962. Renowned cold war strategist Thomas C Schelling identifies game theory as, It is the employment of threats, or of threats and promises, or more generally of the conditioning of one’s own behaviour on the behaviour of others.
There are some terminologies which are essential to understand the entire concept of game theory. In game theory, a game is any situation in which the choices of two or more actors, called players, are interrelated and the outcome does not depend solely on the choice of a single actor. A Player in game theory is an actor whose decisions influence the choices / decisions of another actor. Payoffs are possible outcomes that are involved in strategic decision-making. These are dependent upon the selected strategies of the player. In fact a Payoff is the value associated with a possible outcome of a game. A strategy is an alternative course of action that the two players can choose. We can call it a plan of actions. Rationality is a strict procedure utilizing objective knowledge and logic. It involves identifying the problem to solve, gathering facts, identifying options and outcomes, analyzing them, considering all the relationships and finally selecting the decision. Zero sum games are the strategies such that gains of one player are the loss of the other. In Non-zero sum games players endeavour for maximal outcome and satisfy at a state of equilibrium.
Games in game theory are classified by the number of players involved, the rules applicable to the game and the information available to the players. When games are classified by the number of players, they may be either two-player games or N-player games, where N is the number of players and is greater than two. Games can also be classified by the rules applicable to the conduct of players during these games. Cooperative games are bargaining models where players adhere to coordinated strategies. An example of such games is the Cuban Missile Crisis, where two competing rational actors were willing to bargain for an outcome to avert the escalation of the crisis. Non-cooperative games are those where players are unable to cooperate due to a lack of will to cooperate. Inter-state conflicts, due to the anarchic character of the international political system, are prominent examples of this type of games. In the contemporary world, the Russia-Ukraine War is one significant example. Games are also categorized by available information structure. There are two types: games with complete information where payoffs are known to each player, such as the Game of Chickens, and games with incomplete information where at least one player does not know their payoffs, with the most significant example being the game of Prisoner’s Dilemma.
Representation in game theory is also important. Games are represented in two forms: the normal or strategic form, where the game is represented as a 2×2 matrix, and players try to maximize their gains by utilizing available strategies. The second form is extensive-form games, represented as a tree form, where payoffs are calculated at each node of the tree.
Another very important concept of game theory is Nash Equilibrium. It is a state during interaction where nobody wants to change their behaviour given the behaviour of the other players. It means stakeholders are mutually satisfied by the payoffs achieved and deviation by one would lead to the less beneficial scenario .The Nash Equilibrium is an important concept in game theory because it helps to predict people’s behaviour, even in complicated situations where one person’s payoff depends on another person’s actions.
The modern world is certainly much different than the one during the cold war. Information overloading and use of information as a tool to influence target populace is becoming central to strategic planning of nation states. Moreover, the world is again entering into the era of cold war but this time with more than two blocks to play their role. Strategies derived from game theory will require revisit and would require to be adapted according to emerging challenges while benefiting from available technologies for better decision making.
—The writer is contributing columnist, based in Islamabad.
