USING GAME THEORY TO ANALYZE BARACK OBAMA’S AND THE DEMOCRATIC PARTY’S FAILURES IN THE HEALTH CARE DEBATE

For another essay critical of President Obama’s leadership abilities and handling of a policy matter see: ANYWAY YOU LOOK AT IT YOU LOSE – TWO METHODS FOR EVALUATING BARACK OBAMA’S LEADERSHIP ABILITIES

Game Theory is a powerful tool to analyze and strategize a situation like the health care debate. Last week, I watched the first on-line lecture by Yale professor, Benjamin Polak, on Game Theory. http://academicearth.org/courses/game-theory It was during Prof. Polak’s presentation, in 2007, but founded on the most basic of Game Theory principles, that I began to analyze the health care debate under Game Theory.

At this point, without getting to the other lectures, which I haven’t seen but intend to, what seemed clear to me is President Obama selected the wrong opening strategy for framing the health care debate, which he is now correcting, but with the damage already done.

The five rules Prof. Polak set out in the first Game Theory lecture are:

1. Figure out what you want before you try to get what you want.
a. Payoffs Matter
2. Put yourself in other people’s shoes.
a. Understand what the other player’s desired payoffs are and what, if anything, the other player would accept as a payoff.
3. We are evil.
4. Rational choices can lead to bad outcomes.
5. Don’t play a strictly dominated strategy.

Prof. Polak also sets out two types of players: the Evil Gits and the Indignant Angels. He informs that being an Evil Git is always advantageous if the payoff is larger regardless of what strategy the other players choose. As for the Indignant Angel, this can be a losing strategy because often it is a dominated strategy. For this reason, when an Indignant Angel is playing against an Evil Git he should choose a comparable Evil Git strategy, e.g. choose a dominant strategy, in order to obtain the best possible result.

When I apply these rules to the health care debate, here’s what I see.

The Republicans have been nearly uniformly the student who is going for the A, the largest personal payoff, without thought to the other players. Further, we have known from the get-go what the Republicans want as the payoffs: a return to power. They never possessed an actual interest in a process of compromise that would result in a health care bill. Thus, in the health care debate they are the Evil Git. Obama failed to consider rules 3 and 1 above by putting himself in the Republicans’ shoes and thereby understand what the Republicans wished for as their desired payoff. Instead, Obama employed a rational course of action and, in the process, framed himself as largely an Indignant Angel. As a result of Obama’s failed analysis, under a Game Theory paradigm, he needlessly boxed himself into a largely dominated posture.

I am sure when I get to the other lectures by Prof. Polak the available options that Obama, and the Dems, possessed will become clearer. Quite possibly, there were other opening strategies that would have been more fruitful before Obama migrated to the end-game Evil Git strategy. But, at the very least, one can say that initially meeting an Evil Git strategy with an opening Indignant Angel strategy was flawed. Further, I believe Obama has waited too long to correct his mistaken opening strategy. He may still get a health care bill. But, in the process, he has incurred more damage than needed.

The potentially good news is now Obama is finally meeting the Republicans’ Evil Git strategy with an Evil Git strategy of his own. This started with the televised Health Care summit a couple of weeks ago where Obama began to reframe his strategy as less dominated Indignant Angel and more Evil Git. Obama finally understands what Nancy Pelosi has understood all along: that when the payoff is greater, in this instance the Republicans’ desired payoff to foil Obama and return to power in both Congress and the White House, this has to be met with a comparable Evil Git strategy. This is one of the reasons the right can’t stand Pelosi. Evidence of Obama’s conversion can be found in comments by, and about, Rahm Emanuel in this Sunday’s New York Times Magazine article about Rahm,
http://www.nytimes.com/2010/03/14/magazine/14emanuel-t.html?scp=2&sq=rahm&st=cse, where it was reported:

Emanuel wants to jam a wedge into the fissure inside the Republican Party between, as he frames it, the descending wing that believes in small government and the ascending wing that believes in no government. Republicans lose, in this theory, whether they cooperate with Obama or not. “We’ve got to drive the ball at them,” a senior White House official told me. “Driving the ball at them, making them pick between small government and no government, putting them in their responsibility-and-accountability box. You walk away? You’re walking away from responsibility, and the public’s angry at you. You participate? Your base hates you.”

This is precisely, I mean precisely, the frame that Obama was crafting during the health care summit. Matt Drudge gets this. So do the other conservatives. This is why their rhetoric has become so strident and shrill since the summit.

Back in the Depression, Roosevelt's brilliance was: 1) he employed a largely dominating strategy; 2) he communicated often and powerfully with the American people and 3) he was a natural father figure. How perfect for the times and the problems he faced. Obama doesn't have #3. But he certainly possesses the skill to have done a better job with #2 and he chose to play a strategy that allowed the Republicans to dominate. All this should have been obvious under the known circumstance if he, and his advisers, had initially used Game Theory more fully to analyze the problem from the beginning instead of apparently coming to it this late in the process.

© Copyrighted by James N. Perlman. 2010 All rights reserved.