War and Terrorism: Two Leaders Game Theory

We are getting to a point in age where listening to news about war and terrorism, although unsettling, isn’t really a surprise. I remember myself in childhood, living in Angola, a country who had been in civil war for nearly three decades and wondering: why do people even have wars? It seemed clear to me that war was insane, that everybody in war was losing something, and essentially no one wins a war, they just survive it.

I have grown up a lot since then, and my comprehension of the world has greatly improved. Don’t get me wrong, I still think war and terrorism, and any act of mutual violence really is absolutely insane. But after devoting so much of my efforts into the field of Game Theory and people`s decision making process, some question marks I`ve always had have turned into suspension points…

For those who don’t know what the field of Game Theory entails, it is a branch of Microeconomics which concerns itself not only with decision making process pure and simple, but the decision making process of individuals that know that the outcome of theirs choices isn’t only dependent on their own choices, but on the interaction between theirs choices and the choices of other individuals. Thus, Game Theory is primarily a field of strategy and interaction.

The types of interactions studied in Game Theory are as rich as the types of interactions economic agents face. The interaction between consumers, consumer and seller, employer and employee, firms in competition, regulatory agencies, countries, government and civilians, military powers, etc.

One type of situation is when “players” or simply the individuals involved in the interaction both understand the repercussions of their actions in their own lives as well as others when their action is combined with the other individual’s actions. In this situation, both individuals do the best they can when making decisions taken into account their beliefs about the other individuals actions. In this case, when making theirs decisions, no individual has prior knowledge of the others’ choices, and take only into account what they believe about each others’ actions.

Another type of situation is when either one individual has more knowledge regarding the other or has more power in determining the outcome with their actions. In this asymmetrical situation, the “leader” takes into account the likely responses of the other individuals, here in termed followers, to the actions chosen by the leader. Thus, in this type of situation, it isn’t just like every individual doing the best they can given their beliefs about each other’s actions, but a leader who doesn’t only chose for himself the actions, but also implicitly chooses the actions of his followers because he is aware of their likely responses to his choice.

A much more complicated situation with probable disastrous consequences is when both individuals interacting would like to believe they are leaders, and act as such. They both act to their own according, believing their opponents will and shall behave as followers (i.e. that their actions are conditional on the actions chosen by themselves). I strongly believe this is what we witnessed at the end of Cold War, when humanity found itself at the eminence of a Nuclear War that would potentially annihilate human existence. I also fear it is what we are witnessing right now with this constant war and terrorism all over the world: Each sovereign Nation as well as ISIS all acting as if they had asymmetrical power and influence to determine each other’s actions and try to shift the outcome towards what they each believe to be more favorable to themselves. However, by assuming that, they essentially drive the outcome to be the worst possible scenario for all those involved. The real sad thing is that this type of behavior isn’t insane, it is actually extremely rational given the assumptions they have about one another.

That conclusion hurt deep into my soul, realizing that war is perhaps one of the most rational of human actions, despite the clear dangerous and disastrous outcome it brings to all of those involved. I am not sure what to do in response to all that, where to go from here, because regardless of in which type of position we put ourselves in: as a leader or as a follower, the outcome of this game we find ourselves in can only harm us.

When Europe found itself in this type of situation back in the middle ages with the barbarian attacks happening over and over, their solution was to “get out of the game”, and enter a system of feudalism in which the main objective was to minimize losses, protect themselves and avoid all possible interaction with one another. We know clearly today how harmful this alienation was for development and created what we essentially call the dark ages. If we were to think of something of this sort nowadays is unthinkable given the level of globalization we live in, it would perhaps set us to an even darker age.

The saddest part of all of this for me is that every time I think humanity has come a long way from this type of issues, I realize we are piled higher and deeper into them.