There is great anxiety in America today regarding the lack of legislation being passed. Impasse, deadlock and “do nothing” legislatures are reviled. We don’t have “deal makers”, we do have polarized extremes. It is well said that partisanship is easy, deal making is difficult; criticism is simple, creation complex. But how bad is a deadlock really when groups vying for their slice do not undergo the analysis as to who really benefits and who loses beyond the obvious players have no clue on how the legislation enacted in one year, let alone 5 or 10?
Oliver Wendell Holmes, Jr. published The Path of the Law in the Harvard Law Review in 1897 and explained the law as a sort of zero sum game, essentially there are a finite set of rights humans can hope to recognize. By necessity, legislation allocates rights from one group to another, based on a reaction to human behavior. The arguments are standard: employers employ less people when benefits and minimum wages are high, so we have more unemployed; expensive animal rights laws, such as California’s minimum poultry habitat standards, cost the consumers more, etc. We never progressed beyond that view of zero sum game understanding. But the information age shows that life is more complex that these fundamental positions. What are the goals of the players, and who are they? Do wage and benefits decrease poverty; do animal rights laws increase the nutritive value of eggs and meat for consumers?
Had game theory been available as a tool to the Honorable Mr. Holmes, I think his article would be different.
Game theory is the branch of statistical mathematics concerned with the analysis of strategies for dealing with competitive situations where the outcome of a participant’s choice of action depends critically on that of others; my move in a game of chess will be dependent on how you move; how I respond to an opening in a negotiation will be based on your opener. This is empirical, unlike a pure logical relationship that changes by natural processes, such as when a thermometer is put into a glass of water, by necessity, it must actually remove energy from the glass, in the form of heat to get a reading so the thermometer changes the outcome of the very system it seeks to measure objectively. So the interaction in this system is closed, the laws of thermodynamics do not have multiple outcomes. Game theory has different outcomes. When a negotiator enters a negotiation, their presence changes the game like the thermometer, but the other “player” has choices on how to respond. That makes this a different science. But its utility is greatest in human affairs.
Game theory helps us find reason and more predictable outcomes in complex systems. It deals with identification of players, outcomes, probabilities of those outcomes coming to pass, and payoffs. First used to second guess sea captains in World War II who were searching for German U-Boats. On shore, game theory based decision making led to higher U-boat location predictions compared to those of captains and crews at sea. But the one criticism of game theory is that it assumes rational behavior when humans act with their best interests in mind. But widening the model as some contemporary game theorists are now doing is accounting for irrational psychological tendencies by widening the circle of players and outcomes.
We all already practice game theory short hand when we talk about “unintended consequences” and ”strange legislative bedfellows” but imagine a legislative outcome that is neither unintended nor strange. With tax codes, regulations and interpretations existing in tens of thousands of pages, health care laws that are infinitely rigid yet infinitely plastic, it is time to introduce game theory analysis before legislation is presented. We should demand legislatures and lobbyists spell out all the players, probabilities, outcomes and payoffs before we support one piece of legislation or another.
So can the randomness of legislation ensure the protection of rights and the equal enforcement of laws? Is it that bad to have a do-nothing Congress when we really don’t use the tools we have to figure out what the outcome will be? Are we content with a shot-in-the dark legislative processes? In the information age, legislators and lobbyists alike must conduct a game theory analysis as more and more people are impacted by these actions, often in unjust ways.