Taking on faith that John Chait’s interpretation of the reporting is accurate, it seems that Republicans have announced a plan to filibuster the first vote on the financial regulation bill and then fold. Something seems fishy about that plan.
Now that the Democrats know the Republicans are planning to defect after the first vote, why on Earth would they compromise? Moreover, what is the point of taking the hit by filibustering reform in the first place? It could work, in theory, if you could bluff the Democrats into thinking the GOP might hold the line indefinitely. But I’m pretty sure the Democratic party has access to articles published in Politico, which means the jig is up. So now the Republicans are trying to bluff in poker when they and their opponent know they have the weaker hand, and their opponent has heard them admit that their strategy is to bet for a couple rounds and fold before the end. Why not just cut their losses now? This makes zero sense.
Agreed. Though it isn’t necessary to appeal to game theory, this is an illustration of some game-theoretic ideas. After all, game theory is really just common sense with logic. But, in case the logic is lost on any Republicans (or Democrats), it isn’t hard to find a good review.
Oh, let’s see, it turns out I wrote one in a post on the War of Attrition game.
If you know with certainty that your opponent will fold [early] … then it is rational for you to fight because you will win. … However, if your opponent intends to fold in any round then it is only sensible for him to do so in round 1. Why pay [the costs of a] fight only to fold later? …
Hence, if either player is not willing to fight forever he should fold in round 1. If the other player knows this to be the case, the other player should fight. It turns out these are the two pure strategy Nash equilibria (game theory jargon) in this game: (1) you fight, your opponent folds in round 1 and (2) you fold, your opponent fights in round 1.
Is this really so hard to understand?