Game Theory and the Ryan Pick

If Mitt Romney applied game theory in choosing Paul Ryan, I have renewed respect for him. I’ll explain why, but first a bit of background on game theory.

Game theory is a branch of social science concerned with strategic decision-making. It is most closely associated with economics. Professor John Nash, the subject of the movie A Beautiful Mind, won a Nobel Prize in Economics for his work in game theory. (For a great primer on the subject, read Thinking Strategically: the competitive advantage in business, politics, and everyday life.)

According to professors and authors Avinash K. Dixit and Barry J. Nalebuff:

a game is a situation of strategic interdependence: the outcome of your choices (strategies) depends upon the choices of another person or persons acting purposively.

Borrowing from an example in from Dixit and Nalebuff, two-person political races are somewhat sequential. Each candidate has a choice of which road to take. If Obama takes the high road and campaigns on a ideas, Romney has a choice: he can take the high road, too, or he can take the low road and sling mud.

Each team must think ahead and reason backwards. He must discern his rival’s response, his counter to that response, etc.

If Romney moved first, his decision tree might look like this:

In this case, Romney concludes that taking the low road won’t work. Everyone already knows that Obama is a failed president, a radical who believes America needs to be “taken down a notch.” He also knows that negative campaigning lowers public approval of both parties. Therefore, Romney might figure that taking the high road is his only hope.

In this case, though, Romney didn’t move first. Obama did. Obama, too, realizes that he’s a failed president with a goal for America that dare not speak its name. So Obama actually moved first. Obama has been slinging mud since last fall. His minions pile on more mud–some half-truths, some complete lies–every day. He shows no sign of changing course.

This made Romney’s decision easier. By asking Ryan to be his running mate, Romney can campaign on ideas, on America’s future, on a transparent and important vision for our future. After years of hearing voters complain that they wish politicians would be more serious about the nation’s problems and cut back on the vitriol, Romney has finally done it. He’s left the low road to Obama and seized the high road.

This give Obama a choice: he can remain on the low road, and risk alienating voters who want a national debate about the legitimate role of government in our lives, or he can take the high road and risk alienating voters who would cringe at his twisted and starkly un-American vision of our future.

I don’t know that Romney reasoned this way, but if he did, it bold, brilliant, and brave.

Related articles

• Rush: Economy to rocket with Ryan win (wnd.com)
• Economics, Game Theory and Rational Participants (abbreviatedknowledge.wordpress.com)

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