‘Game Theory’ is the science of strategic thinking, in other words, it lays down the rules and principles for thinking about strategy, and strategy is all about positioning. In order to win (against an opponent in business or politics), position must be unique, and that is created by identifying a change, meaning, if someone asks you ‘what is your strategy?’, in other words, what they mean is ‘what is the change needed to win?’
Game theory has applications in all fields of social science like economics, as well in politics. It’s a very comprehensive subject but in this post, I will discuss just one of its applications, which is making strategic moves credible. I will apply this rule to analyze a real-world ongoing political situation here in India- the recently announced Minimum Income Guarantee (MIG) Scheme by Indian National Congress. And anyone who wishes to be good at strategy must have strong thinking skills, so understanding of how game theory works is a must as it enables us to think methodically and improves our overall acumen. 
“To be literate in the modern age, you need to have a general understanding of game theory” – Paul Samuelson
The Political Scenario
Election season has begun. Indian National Congress’s (INC) President Rahul Gandhi on 28th of January announced that if voted to power in 2019, Congress would provide a Minimum Income Guarantee (MIG) to every poor person. When a state provides schemes such as health and unemployment insurance, government-financed pension, minimum wages etc, then such a country is called a modern welfare state. But the purpose of this article is not to discuss economic feasibility or challenges of implementing MIG scheme, but rather it’s influence on voters’ behavior as a measure of political strategy prior to general elections 2019.
Soon after the announcement of MIG Scheme, it became a hot topic of discussion across mainstream media and leading journalists started raising questions like ‘Where is the money?’ and many wrote articles on its consequences of being practical or just an outlandish step to woo voters. This type of news surely left voters confused and sent the so-called TV experts into a frenzy, while unwanted noise continued with no clarity about the situation.
Now, as a political analyst or a strategist how can one exercise his judgment about this situation? Does this move help Congress in mobilizing voter’s support to win elections? Or will people of India consider such a move as tactical bluffing and will not be influenced by MIG announcement?
In this backdrop, on 8th of February a famous French economist Thomas Piketty, as stated in media, said he is helping Rahul Gandhi in framing Minimum Income Guarantee Scheme. Given this scenario assume you are being invited by a news channel to participate in a debate about this situation, then, how should we interpret this entire situation? Or are there any tools that we can use to analyze this situation to make an expert comment regarding its impact on voters? And what would be the consequence of expert celebrity economist making a statement in favor of INC?
The Rules And Principles Of Game Theory
“A verbal contract isn’t worth the paper it’s written on” – Sam Goldwyn
In most situations, mere verbal promises should not be trusted. In the above political scenario, Congress president’s announcement of welfare scheme is just a promise. Credibility is a problem with all strategic moves. If your unconditional move, or threat or promise, is purely oral, why should you carry it out “if” it turns out not to be in your interest to do so?
In other words, how can people of India be assured that Rahul Gandhi will deliver on his promise without any credible commitments towards his own actions? Strategically aware voters will expect any political party to mislead them and therefore will not be influenced by their announcement of welfare scheme that people perceive as being put on display for their own benefit. So what is the solution to make people or voters of India trust Rahul Gandhi’s public announcement and is worthy of being credible? This brings us to a first rule of designing credible commitment which is – any strategic move will be rendered worthless without credibility, and credibility requires a commitment to the strategic move.
As per game theorists, a strategic move is designed to alter the beliefs and actions of others (voters) in a direction favorable to yourself (INC). In our current political scenario, the strategic move is Rahul Gandhi’s promise to provide a minimum income for the poor lot. And so far this is just a promise, not an assurance, so this strategic move could hardly have any positive influence over the beliefs and actions of voters in favor of INC, hence it is facing the problem of credibility.
But, on 8th of February, collaterally this move was reaffirmed with yet another news. Celebrity economist, Thomas Piketty stating his interest in helping Rahul Gandhi frame his intended welfare scheme gave much-needed credibility to Rahul Gandhi’s promise. How? Because Thomas Piketty is an expert economist author of one the bestselling books “Capital in 21st Century”, so Piketty’s commitment to framing of scheme gave much-needed credibility, simply because he is a man of reputation, so the introduction of Piketty is a collateral action in favor of announcement of welfare scheme by INC. This brings us to the second rule for designing credible commitment which is- to make a strategic move credible you must take a supporting or collateral action. Such action is called as a commitment.
From the above discussion, we can infer there are two elements of strategic move:
1. Planned course of action/moves
2. A commitment that makes this course credible.
And behind this system, there is an underlying principle of game theory, which is to change the payoffs of the game. This can be done by building a credible device,establishing and using a reputation. With the introduction of Thomas Piketty into this political scenario, the payoff of the game changed from promise to assurance, at least to some extent considering ground realities.
Establish And Use A Reputation To Change Payoffs Of The Game
The above tactic changes the payoff from promise to assurance because it is more costly to break the commitment (as Piketty’s reputation is at stake) than to keep it. We can summarize and conceptually frame the entire strategic analysis of this political scenario into a system as follows:
Strategic Move: Rahul Gandhi’s promise to provide the Minimum Income Guarantee (MIG) Scheme
Collateral Action: Introduction of French economist Thomas Piketty as a framer of welfare scheme
Credible Device: Thomas Piketty’s reputation
Change in Payoff: From Promise to Assurance
What change is needed to win? India’s democracy to evolve as a modern welfare state
Yes, use of established reputation is a credible device by which INC is trying to build commitment to their promise of welfare scheme as described above, and there are seven other credible devices which I will hopefully write about using specific examples from the world of Indian politics, and as part of framing strategic policies, those credible devices are 1.Write contracts, 2. Cut off communication, 3. Burn bridges behind you 4. Leave the outcome to chance 5. Move in small steps 7. Develop credibility through teamwork and 7. Employ mandated negotiating agents.
My Own Assessment Of This Political Scenario
To what extent does Piketty’s commitment build credibility, is a matter of exercising good judgment considering various other strategic moves from political opponents who are simultaneously trying to influence the same group of voters, which in reality, it not so simple.
It is left to the strategist in charge of this political situation to strengthen Rahul Gandhi’s strategic move by taking other necessary collateral actions. I strongly believe this move will surely influence voters in favor of INC for two reason, firstly Congress party’s political commitment to evolve Indian democracy into a welfare state requires empowering of citizens at large with schemes such as MIG; and secondly, with the introduction of Thomas Piketty he will have an opportunity to implement his ideas on progressive tax systems for building modern social state as described in his book. That is only going to strengthen the political narrative of INC, leading to a positive influence on voters because they are being empowered, while wealthier people will have to bear a heavier burden.
In short, a political strategist’s job is to design strategic moves keeping in mind the accompanying problem of credibility, and the thing that separates a great political thinker is the ability to creatively device credible commitment to these moves. Commitment is unlikely to be taken at face value. Your commitment may be tested.
Credibility must be earned. It requires finding a way to prevent going back. If there is no tomorrow, today’s commitment cannot be reversed. These pre-election measures and strategic moves will definitely help politicians in mobilizing voters in their favor, but unfortunately there is a fault line- once politicians occupy public offices and take control of the parliament, citizens can just hope these assured promises come true, so, that leaves me with another question- who will provide the checks and balances to make sure politicians fulfill their commitments while they are in charge of government, and how?
Mohammed Raziq is an entrepreneur and Founder of INC 2.0 Political and Economic Reforms @ F70 Think Tank. As a master strategist with his pioneering thinking, he designed a new political and economic model for unlocking the true potential of India. Twitter handle: @raziqinc2