Detailed analysis of Russian leadership policy shows that their strategies are guided not by madness, but the intricacies of game theory.
Game theory
Game theory is a branch of applied mathematics incorporating the study of options. Used in the social sciences such as economics, biology, political science, computer science and philosophy, it attempts to determine behaviors mathematically in strategic situations where the subject’s success depends on the choices of other participants.
Game theorists use the Nash equilibrium to analyze the strategic interaction of several players. This provides an opportunity to anticipate what will happen when multiple people or institutions make decisions simultaneously. The result depends not only on one’s own decision but also on the decisions of others. John Nash’s idea is that one cannot foresee the outcome by analyzing each choice in isolation, but by considering what each player will do and how this affects the other participants.
Russia’s strategy
Russia’s foreign policy strategy appears to be largely based on the Prisoner’s Dilemma in game theory, or the Blackmailer Paradox, first introduced by Robert Aumann. Players are offered a large amount of money provided that they make a decision over how it should be split. If no decision is made within a specified period of time, no one receives the money.
To complicate matters, a blackmailer appears who sets the condition: “I get 90% and you all share10% – take it or leave it.” Another player argues that 10% is better than nothing and agrees. Decisions may change depending on whether a single game or a series of games are being played. Assuming a single-player game, it makes sense to accept any offer by the blackmailer above zero, but in a series of games, the most effective strategy is to teach the blackmailer a lesson.
Of course, foreign policy is a long-term game and Russia’s actions are a form of conditional “blackmail”: violation of international agreements, annexation of territories, financing of terrorist organizations and so on. Western partners are clearly concerned and have countered with the threat of tough sanctions, but these could be damaging for all. As a result, the “blackmailer” emerges victorious.
It is clear that the Russian leadership has used this strategy repeatedly, relying on Western partners’ fear of losing more. This in turn prompts them to go further.
The coward game
In game theory, there is also the “coward game”. Two motorists rush toward one other and the first one to turn and avoid danger loses and is branded the “coward”. The one who does not flinch wins the game. If neither turns, they die in an instant.
The Nash equilibrium, i.e. the most effective strategy, applies here when one of the players retains the designation of “winner” and the other “coward”.
Complexities are introduced to the game by factors that influence the decisions of the players. For example, one of the motorists pretends to be psychotic and pledges to go to the end, while the other adopts the “coward” strategy, but his girlfriend is watching from the stalls and he cannot do it.
It is logical to see the Russian leadership as the crazy motorist: “Look, I’m going to attack Ukraine – what will you do?” The Western world has two options: to accept the role of “coward” or to change the strategy of the game, adopt the crazy motorist role and heighten the stakes. Here, Russia puts the West in a position where the role of “coward” is a priori unacceptable; that is, there is actually only one option.
The game can also be understood through the lens of the Cuban Missile Crisis. On October 15 1962, Soviet leader Nikita Khrushchev announced that the Russians intended to deploy nuclear missiles in Cuba, less than 200 kilometers from the US coast. Khrushchev gave President John F Kennedy a clear signal: “I’m here in the car and I’m coming straight for you. What are you going to do?”
Kennedy called in a team of advisers, and they gave him a list of five options: i) do nothing; ii) call the UN and file a complaint; iii) instigate a blockade of Cuba; iv) issue an ultimatum to the Russians – either remove the missiles or we start a nuclear war; or v) start a nuclear war. Kennedy chose (iii) the blockade, resulting in the role of “coward” passing instantly to the USSR.
Fast forward to 2022 and Putin can, at any moment, simply say, “It was a military study but look at the panic on your faces – you’re the cowards.” Since Putin has little to lose, he may as well play, whilst hammering the Ukrainian economy in the process.
The Russian economy is also suffering from the threat of large-scale sanctions, but with the withdrawal of troops, the stock market and the ruble will quickly stabilize and those close to the Russian leadership will also make fortunes. Nord Stream 2 will likely be approved immediately so that there is a mechanism to contain Russia in the future.
Lessons from the game
Relying on the Nash equilibrium, it is quite easy to predict the actions of the Russian leadership: they will escalate the situation to the maximum and threaten the West, knowing that no one will approve anticipatory sanctions because then the mechanism for holding back Russia will disappear. As a result, next autumn, we might once again see Russian troops on the border with Ukraine, in even more threatening numbers.
Putin appears to play the role of the “crazy motorist” or “master villain” with fun and dexterity. As yet, he hasn’t played the nuclear card, which he could be saving for a future round.
In game theory, it is important not to overplay oneself. Instead, one should correctly assess the risks because mistakes at such a high level can be very costly.
References:
Shapira, H (2017) Gladiators, Pirates, and Games of Trust by Haim Shapira
Dixit, A K and Nalebuff, B J (1993) The Art of Strategy: A Game Theorist’s Guide to Success in Business and Life
About the Author
Aleksandra Klitina is a political analyst, public activist and former Vice Minister of Infrastructure of Ukraine.
In 2019, Aleksandra Klitina was Deputy Minister within the Ministry of Infrastructure. She facilitated the realization of the reform program, including approval of the law on electronic weight control and law of safety audit; and promoted liberalization of the transport markets.
2014 -2018: Within the Ministry of Infrastructure Mrs. Klitina coordinated international technical assistance projects including the US Treasury mission with Ukrainian Railways. This included analysis of operational efficiency, financials, evaluation of the locomotives and wagons fleet and development of the reform action plan for the Ukrainian Railways.
