Intelligence Analysis Behavioral and Social Scientific Foundations (2011) / Chapter Skim
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3 Applications of Game Theory in Support of Intelligence Analysis--Bruce Bueno de Mesquita
3 Applications of Game Theory in Support of Intelligence Analysis--Bruce Bueno de Mesquita
Pages 57-82
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From page 57... ...
Such methods can provide an independent perspective that informs and stimulates debate. I examine how game theory reasoning, combined with empirical, mostly quantitative, analysis, can help inform foreign policy analysis by (1)
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From page 58... ...
The chapter then builds toward the ultimate goal: reliable means to predict and engineer policy outcomes. To do so, the chapter discusses the generic classes of constraints commonly designed into different game theory models, especially conceptual constraints that can help inform and organize approaches to foreign policy problems.
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From page 59... ...
. The various ways in which the features of a game combine can provide a framework for interpreting specific foreign policy matters in a broad setting whose logic has been carefully explored.
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. Others, as reported in the Soviet newspaper, Izvestiya,2 examining strategic decision making under economic and political constraints, predicted that the Soviet Union was steadily approaching a cut-point between alternative outcomes.
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CATEgORIZINg CONSTRAINTS ON FOREIgN POLICY ACTIONS In thinking about national security problems, five constraints draw our attention to features of different games that can help illuminate the analysis of national security issues. These constraints are: (1)
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by creating player types and a subjective probability distribution over the types (Harsanyi, 1967–1968)
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. But sometimes reducing uncertainty increases the risk of conflict escalation instead of defusing it.
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Estimating the willingness 6 This is a stylized example to make clear how uncertainty reduction can exacerbate rather than diminish tensions. Of course, a fuller analysis would need to take into account the reputational effects of alternative courses of action, the elasticity of demand to be a terrorist conditional on changes in the expectation that the government will inflict costs on such groups, the credibility of the government's commitment to provide policy concessions, and the credibility of the terrorist group's promise to disarm, as well as many other considerations.
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From page 65... ...
Nondemocratic leaders who survive in office past approximately 1 or 2 years experience a significant year-to-year decline in the risk of being ousted (Bueno de Mesquita et al., 2003; Egorov and Sonin, 2005) , all else being equal.
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From page 66... ...
between players that do not in fluence the costs and benefits; that is, the pay-offs, to the players in the game. In the unusual foreign policy case of pure coordination, cheap-talk signals are taken as meaningful because players have no incentive to bluff or deceive each other (Crawford and Sobel, 1982; Spence, 1973; Sartori, 2005)
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From page 67... ...
. In addition, despite widespread advocacy for imposing sanctions to redistribute costs and benefits in many difficult foreign policy situations, both logic and evidence show that sanctions are more likely to be effective at the threat stage than at the implementation stage.
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From page 68... ...
Morrow (1991a) in particular shows theoretically and empirically that states can coordinate by joining a mutual alliance in which one gains improved security against threats from enemies at the expense of some loss in foreign policy autonomy and the other sacrifices some degree of its own security, by risking entanglement in its partners' problems, in exchange for improvement in its ability to act independently on foreign policy matters.
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From page 69... ...
. Arms races are characterized by absorbing costs now to prevent defeat later.
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Many -- perhaps most -- foreign policy decisions reflect endogenous choices, or choices that create the value attached to explanatory variables -- such as the demands made by contending sides in a dispute -- to improve each player's expected results. For example, security-conscious calculations about what to seek as the resolution of a dispute take into account not only what the player wants, but also what the player anticipates will minimize its risks of a particularly bad outcome (Morrow, 1991b; Smith, 1998)
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From page 71... ...
Selection effects that result in "the dog that didn't bark" often lead to selection bias in empirical research. Let me illustrate how strategic selection effects and the case selection bias they lead to can result in unwarranted inferences by discussing the reputed unreliability of military alliances.
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From page 72... ...
A focus on strategic interaction instructs us to anticipate that we should expect that the applicable alliances will generally prove to be unreliable if an attack has taken place. A, after all, has already taken into account 10 Nearly five times as many alliance partners become war participants following an attack as do nonallied states (Siverson and King, 1980)
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From page 73... ...
Statistical analysis runs into this failure because it generally assumes that the values taken by independent variables are exogenous; that is, are determined outside the strategic setting rather than shaped by it.11 In strategic settings -- and most foreign policy problems involve a substantial element of strategic interplay between contending sides -- the assumption that the values of the explanatory variables do not depend on expectations about how they will shape outcomes is problematic. When choices are made strategically, they are forward looking.
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From page 74... ...
The standard account of how arms races cause war builds on stimulus-response, nonstrategic explanations of arms racing. The claim is that when a country builds up its arms, it makes its adversaries fear that their security is at risk.
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From page 75... ...
Other quantitative, but not statistical, approaches to foreign policy problems have also proven effective in predicting the dynamics and the outcomes of out-of-sample events. Some applied game theory models, for instance, have been used to evaluate national security problems and have even found use among some intelligence analysts.
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From page 76... ...
Fortunately, analysts do not need to be methodologists or game theorists to capitalize on the insights that can be gained from thinking about problems in a strategic vein. They can combine their deep understanding of history, culture, and idiosyncratic factors impinging on any case with the caseoriented insights of applied game theory models, rendering their analysis more complete and transparent.
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From page 77... ...
They increase the number of equilibria and suggest paths to outcomes that may be no closer -- and might even be less close -- to the choices of actual decision makers than is true in standard game theory modeling. Indeed, evolutionary models -- that incorporate various forms of short-sighted behavior -- stabilize at a Nash equilibrium outcome of a more standard game designed to capture the strategic setting.12 Yet evolutionary models can arrive at the evolutionarily stable equilibrium from a nearly infinite number of paths, implying that the process of decision making leading to outcomes is unpredictable.
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, and numerous other independent auditors of game theoretic results about national security matters all conclude that some applied models prove highly reliable, hitting, as Feder puts it, "the bull's eye" twice as often as the intelligence analysts whose data were used to estimate variables in the applied models. CONCLUSION International relations and foreign policy problems are readily clustered according to the broad categories of constraints examined by game theory approaches.
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From page 79... ...
American Political Science Review 79:156–173. Bueno de Mesquita, B
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From page 80... ...
American Political Science Review 88:577–592. Fearon, J
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From page 81... ...
American Journal of Political Science 35:904–933. Morrow, J
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From page 82... ...
American Political Science Review 92:829–844. Shepsle, K
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