Skip to content

Battling Begums and Game theory

October 9, 2013

Battling begums of Bangladesh have once again dragged the country into another deadlock. Many might get annoyed at their rustic mannerism. Are they really behaving irrationally? Surprisingly, the answer is no.

Game theory can explain that there is indeed some rationality in what seems to be irrational behavior from our two leading political party chiefs.

Backdrop

First , I would like to present the backdrop to those who are not familiar with Bangladesh politics. Awami League (AL) and BNP are country’s two major parties who rule the country for 5 years in turn. In 1996, a caretaker government, run by advisors backed by both parties, was introduce to transfer power smoothly by holding a free and fair election. The maximum tenure for such government was 90 days. But in 2007, a caretaker government breached the law and stayed for 2 years before holding a general election. Going beyond its constitutionally assigned role, it tried to punish the politicians and businessmen for their wrongdoings. Later, when Bangladesh returned to democracy, a high court verdict abolished the caretaker system but left the choice of holding next two elections under such caretaker government to the Prime Minister. Incumbent PM has decided to hold next election under an interim government that will be headed by her. BNP has strongly opposed to such move and demands that next election be held under a neutral old caretaker system.

The Outcomes

Before analyzing the game, it will be better to discuss briefly the outcomes in different scenarios.

Awami League (AL) has two choices: to hold an election under a traditional caretaker government (C) or under an interim government headed by Sheikh Hasina (I). Given AL’s choice, BNP can respond to that choice by taking part in the election (TP) or by not taking part in that election (NTP).

If there is an election under traditional caretaker government, AL fears that such type of govt. might not hand over power to democratic powers in short run and might rule for a long time , as did the last caretaker government, which ruled for around 2 years. If the caretaker government holds election and remains biased towards BNP, then BNP has every chance to win the election. Despite having some BNP biased advisors, BNP will not participate in election if it finds that the caretaker government is not enough neutral. However, it will wait for some time to let the caretaker government create a level playing field.

On the other hand, if there is a poll under an interim government headed by Sheikh Hasina, BNP fears that such election will bring AL back again into power for another 5 years. If BNP does not take part in that election, then AL will carry off but might not rule the country for a full 5-year-term and might force to call an early poll under another interim government, which will be backed by both parties. Let’s say the AL’s second term will be 1 year maximum, which is long enough to implement the tribunal’s verdict on major war criminals.

The Game

Now let’s come to the game. In studying their interaction, I have chosen sequential game, which requires a game tree to describe the game. The payoffs, utility each player receives if a particular combination of strategies is chosen, are indicated by the ‘leaves ‘ of the tree. The first number of a leaf indicates the payoff to AL and the second number indicates the payoff to BNP.

The Game Tree

Determining the outcomes of this type of games involves two important criteria:

• In equilibrium, decisions must be mutual best responses, i.e. , each player’s decisions are optimal given what the others have chosen.
• In equilibrium, decisions must be sequentially optimal, i.e., optimal for the decision-maker at the time they are chosen.

In this game, AL has to make the first move. If AL chooses to hold the next election under a traditional caretaker system, BNP will be better off by taking part in that election since payoff in taking part (5) is higher than that of not taking part (2).

Now, if AL chooses to hold the next election under an interim government headed by Hasina, then the best response from BNP will be not to take part in that election. Payoff 2 is larger than payoff -5, which is obvious from the game tree

In two sub games we have two equilibria. But what will be the sequentially optimal decision for AL? Backward induction is a method that will help us to find out AL’s optimal decision. This method requires going to the end of the game and reason backwards to the beginning. After examining carefully all the payoffs of the game tree, AL will optimally decide to hold an election under Sheikh Hasina since 3 is higher than -7

Missing Lines

At first glance, it seems that this equilibrium (3,2) is leading us to a cul-de-sac. But it is not. In the short run, AL might be reelected, as I have explained earlier, but might not carry a full-5-year tenure through. But it will have enough time to implement the International War Crimes Tribunal’s verdict. After the one sided election, BNP’s moral will be high, it will force AL to go for an early poll that AL has to comply. There are some other explanations to get at from this equilibrium. In the long run, it indicates that both parties, willingly or unwillingly, are expecting intervention of a third party, not the third force or the Army, to create a level playing field, where both parties have a fair chance to win.

References:
Hal R. Varian (1992). Microeconomic Analysis, Norton.
Khalil, Fahad (2006).”An Introduction to Game Theory”, Readings in Microeconomics. Khalil, Fahad and Rashid, Salim, ed. University Press Limited.

Advertisements

From → Analysis

Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: