December 9th, 2010

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The Problem For Democrats In Game Theoretic Terms

I will hopefully have a chance to develop this more fully, and this probably doesn't help people too much, but it just might help a handful of people understand why the Dems seem so reasonable and keep losing, and the Rs seem so unreasonable and keep winning.

Democrats believe each legislative/regulatory fight is a one-time, non-iterative unique zero sum game, and play accordingly.

Republicans believe each legislative/regulatory fight is simply the next round in an iterative repeating game where the game as a whole is zero sum, but each round is not.

This is why Ds always concede, because they believe that each contest is unique and zero sum. Under this rational, in any fight, it is always better to get "something," because once the game is over if you have nothing, you lose. Also, they do not believe there is a penalty or consequence from game to game. Thus, in each game, Democrats believe they start in the exact same position, against players that are effectively new players (no, they are not, but they behave as if each game is unique and prior behavior in previous games never happened).

Rs, by contrasts, regard the entire political process as one, vast, single zero-sum game. It is also an iterative game. This means they put less value on losing in a single round, and treat all rounds as related. They behave with an understanding that behavior by players in previous rounds is likely to be repeated, and to be conditioned by outcomes in the current round. Thus, it is worthwhile to engage in strategies that gradually erode the position of the other player(s) over time, even if that costs something in a related round. Similarly, they will reject an apparent increase in the win in any given round if they feel it conveys advantage to the other players in a subsequent round. Because the game is iterative.

The problem is that there are some elements of truth in both positions. (We'll skip over whether the game is intrinsically zero sum or whether that is simply how the game is played.) For certain stakeholders and players, any given fight can be a unique, zero sum game. However, it is also true that it is a never ending iterative game over multiple rounds. This is why Ds consistently erode their base over time. Because however right they are in the short term assessment, the long term nature of the game eventually catches up to them. Republicans, by contrast, can suffer the occasional disastrous defeat (e.g., fielding "unwinnable" candidates such as Sharon Anngle or Christine O'Donnel, dealing themselves out of health insurance reform), but will ultimately recover and prevail using this strategy as long as the Democrats do not alter their own strategy.

Would be interested in comments, particularly from folks with a better understanding of game theory.