What do General Pervez Musharraf and President Gaddafi have in common?? Their exit from office was predicted by (among others) a certain Mr. Bueno de Mesquita. Who is he you ask ? Some sort of an Astrologer or Psychic with a connection to the divine you think. But let us ask Mr. Mesquita, “I don’t have insights—the game does”, he quoted in an article in New York Times. The “Game” he is referring is the game theory which is a method in mathematics for analyzing circumstances in which a person’s success depends on others choices. Mr. Mesquita is the owner of a company, Mesquita & Roundell, which is in the, now increasingly lucrative field of analyzing and, for want of a better term, predicting the political & militaristic landscape of a country. Their primary clients are…well…other countries!
So how does this work?
Well the game is basically a computer model in which you feed the data and it will paint you a picture of what the current events (input data) will lead to. For example in Mr. Gaddafi’s case, the prediction was made on the basis of the fact that the Americans cut off aid to the Libyan regime last year. This meant that the Libyan dictator would have less money to bribe the cronies in the army who provided him protection. When the jobless youth in the country realized that the armed forces were less likely to use violence to quell an armed rebellion, they started a revolt. The computer model or software has certain basic assumptions.
Number one being that all the persons involved would act in their own self interest. Number two is that emotions would not be a part of any decision making process. Although it sounds pretty straight forward, it is not. Collecting the relevant and accurate data can be a pain. And the accuracy of the prediction depends on the accuracy of the data. Collecting the relevant information involves analyzing all the people who play a role in influencing the decision. Missing out a single person can be detrimental. Also how often do emotions not play a part in the decisions people take?
From IPL auctions and an end to war…
The applications do not end with political guessing. Applications range from telling organizations where to have offices to finding terrorist hideouts (read Osama bin laden). Companies are now offering consultation to potential bidders in auctions on the how to make that perfect winning bid. Bidders who are desperate to win may end up paying more than necessary for their prize. Game theory software allows them to guess the competitors bid based on background data of their competitors and the potential prize. Thus minimizing the gap between the highest and the second highest bids. This would drastically bring down the insanely high amount money being paid at IPL auctions, much to the dismay of cricketers and the happiness of team owners.
Another major application would a chance to end war. Conflicts are generally about which country has the capacity to withstand more damage. This can be estimated by game theory and thus dissuade the apparent weaker side to not pursuit in violent solution. Game theory can also help remove deadlocks in international negotiations. As negotiators everywhere know, the first to reveal what it is willing to compromise on gives up considerable leveraging power. In this situation a computer can play a mediator. Both sides will enter where they stand and what they are willing to compromise and the game theory software after analyzing the data will chart out the best solution.
….to a better world
In the future, maybe nations will avoid all the violence & bloodshed and settle their disputes without firing a single bullet. Today, game theory softwares are not advanced enough to simulate a war or play a mediator in an international dispute. But Mr. Mesquita is sure that in the future they will be. Optimistic? Although the man predicts future for a living, and has a good track record, let’s wait and watch for now.
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