(This OP is adapted from a post on my blog, which includes visuals.)
Lately a lot of people have been wondering about the strange behavior of Congressional Republicans. I do not mean their belief that lower taxes and less government spending are good. This is an entirely defensible set of beliefs, regardless of whether one happens to agree with it. When I say “strange behavior”, I mean the tactics that they’ve been using in the past six months or so. Not compromising in even the smallest degree, offering a budget that’s political suicide, and seriously suggesting the idea of defaulting on federal debt.
I think that to understand what the Republicans are doing, you have to look at a game theory scenario called ‘The Battle of the Sexes’. We can set up the current budget negotiations as a game theory scenario. The players are the Republicans and the Democrats. Each side can choose to either hold strong to its position or cave in. We determine payoffs as follows:
If both sides hold strong, there’s a debt default, catastrophic for both sides but slightly worse for the Republicans because the public will blame them more. Republicans: -100 Democrats: -80
If the Republicans hold strong and the Democrats cave in, the Republicans get what they want, namely big spending cuts with no tax hikes. Republicans 5, Democrats -2
In the reverse scenario, payoffs are reversed. Republicans -2, Democrats 5
If both sides cave in, both sides get some but not all of what they want. Republicans 0, Democrats 0
It’s much easier to visualize if you read the blog post, but the end result is that this ‘game’ becomes a version of the Battle of the Sexes scenario in game theory. Now, one interesting facet of that scenario is that from a psychological perspective, it’s to each player’s advantage to be seen as unwilling to change one’s mind. If the other player thinks that you won’t even consider caving in, they’ll be more likely to cave in rather than risk the outcome where both sides hold strong. In the particular game based on the budget negotiations, the consequences of a ‘double hold strong’ are so severe that nobody could sanely consider the possibility. Hence, if the Republicans want to play the game with the appearance of being totally obstinate, they also have to appear to be nuts. And if we assume that they’ve had this moment in mind ever since the last election, the thesis that they’re trying to make others think that they’re nuts would account for their behavior this year.
Admittedly the scenario I’ve outlined is crude and the payoffs I used are arbitrary, but I believe that in general principle it captures what’s happening in the present political moment.