Wednesday, December 24, 2008

Preemption: Mercantile and Military

It is important to understand the stakes and strategies defining the current Indo-Pak confrontation. The two rivals have gone beyond the stage of negotiation, and are testing each others resolve. The next step may be a preemptive strike by one against the other, and from there-- war.

In this blog I describe the anticidents of this situation, then create a framework with which to analyze the situation, and finally make recommendations as to the next steps.

Preemption is relevant when two rivals operate in a competitive theater,
1. at least one of the players is known to perceive "zero sum" constraints,
2. both perceiving there to be first-mover advantage or, as is more common, second-mover disadvantage,
3. situational arithmetic prevents cooperation, and
4. there is uncertainty as to the intent of the players

We superimpose on this structure the default game-theoretic constrains (see Hurwicz, Maskin, and Meyerson, 2007 Nobel in economics) viz.,
A. Each player enjoys "selfish agency," and
B. Each sees information and resource asymmetry as a source of advantage

We also assume that Mike Jensen's REM (Resourceful, Evaluative, Maximizing) model obtains-- not so much to simplify our exploration, but more on account of the realism this concession brings to the analysis.

Relevant examples here are
Game(I) Pepsi versus Coke
Game(II) India versus Pakistan
Game(III) Anne Anderson, et al., v. Cryovac, Inc., et al.

We take the first from the business world, the second from politics, and the last from the movie "A Civil Action"-- a combination of the two worlds.

Now, Game(I) has been played out, and we go back to the Cola Wars of the'80's and 90's to revisit the narrative. (I take the Indo-Pak situation very seriously, and am not seeking to dilute that seriousness with this example. I am merely trying to trial-run our model on a non-normative game.)

So, Pepsi and Cola are fighting for market share. And, if one wins, the other automatically loses (market share.) Both expect the other to try and wrest advantage. Both seek agents in this fight-- fans, who amplify their sides message and (wittingly or unwittingly) help grab new Nielsen-points.

To take one example, Pepsi launched what ended up being a very successful campaign-- the "Pepsi Free Stuff" roll out. This helped Pepsi outsell coke in Atlanta, the Mecca of the Co'cola drinkers, during Olympics held in that city. Coke sought to replicate the success of this campaign, but clearly Pepsi had a first-mover advantage.

However, fighting over the Nielsen-points for the two was costly, and was turning effectively into a competition on price and quantities-- you either reduced your price, or sold less. Their agents were acting selfishly, for example when one "Free Stuff" enthusiast sued Pepsi for significant damages.

The wars cooled down when the two realigned their utilities, Pepsi by going for a dominance of the snack market, and leaving the dominance of the Cola world to Coke. The ability of the rivals to recognize the mutually-assured destruction inherent in their competition, and subsequent concessions, helped them cease hostilities.

In Game(III), the case of Cryovac v. Anne, as the movie A Civil Action shows, the two rivals, each seeking to visit examplary punishment on the other, were on a trajectory of a mutually destructive litigious war. However, the presence of an external arbiter (the courts of law) brokered their competing claims to impose a settlement.

When we move to the Indo-Pak conflict, we seek to identify the "Neilson-points" equivalent of this conflict. The candidate quantities could be
1. National security (Mumbai attacks)
2. National honor (Appearance of weakness in the comity of nations)
3. Territory (Kashmir)
4. Chances to win an election (for Congress in India)
5. Control over polity (Pakistan, the Army, vs. Politicians, vs. Militants)

All these are quantities that can be increased and, if they increase for one, the other sees their own utility decrease. Granted that 4. and 5. appear to be, and are, predominantly inward looking sub-games. However, they impose a heavy externality on the relationship of the rivals.

At a superficial level it is #2 that is the key variable that each is seeking to maximize, at the other's expense. In what follows, I posit Honor to be the resource under contention ("Neilsen-Points" or revenge in the the other examples.)

Honor is an "irrational" quantity-- it is subjective and non-material. That said, it is very clear to the partisans as to where the maximization of their utility lies. For India, it is in getting Pakistan to respond by dismantling its version of "Pepsi Stuff" campaign.

For Pakistan, this campaign (involving terrorists as free-agents) has brought them great dividends, and that success has come to imply virtue-- the strategies success against their key nemesis sanctifies it. In the triumvirate of Military-Militant-Politician struggle for power in Pakistan, India-bashing is the best way to gain advantage.

Since the interests of the two parties are, at least to the first observation, monovariate-- i.e., they both want the maximization of the same one variable (national honor), and the victory of one is the others default loss, this is a "stale mate" till one of them out-chickens the other.

Or, as in the case of Pepsi and Coke, they align their utilities such that they are not sucked into a zero-sum game: India could insist on security, and Pakistan on honor, and implement a "joint petrol" of border regions.

If they don't realign their interests, each giving in where the other is the most adamant, and getting symmetric concessions in return, then they either "fight to the finish," or an external broker will need to impose their will to help reach a settlement. Which is kind of what the British did between warring principalities.

Now, what if we decide to fight-to-finish? That is when the calculation of the (next) preemptive strike becomes relevant. We can agree that the attack on Mumbai constituted the first preemptive strike, though we clarify this later.

Pakistan, as we discussed briefly, has three groups jockeying for "harms India the most" badge. Their implements, however, are different. The military uses soldiers, and the militants, to invade "disputed" territory. This makes them popular, and shows the politicians to be weak-against-India and not-in-charge. The militants use the fundamentalist leanings of the foot-soldiers to prevent the military from completely controlling them, and strategically incite trouble with India to keep the Army off balance. The politicians try to invoke dreams of "rule of Law" and development to contain the increasing power of the brass and the Mullahs.

There are periodic tensions between the two countries, incited by turns by the military and the militancy. In the interim between these episodes, the politicians on the two sides seek to "normalize relations."

The problem is, each episode requires a retaliation from the Indians, which obligates the Pakistani politicos to greater bellicosity. Indians expect contrition, and contrition is exactly what these besieged and discredited politicians cannot express-- that is assuming they would want to.

The two neighbors are currently in the throes of such an episode. The question is, how will they resolve this crisis. The options, as we discussed, are
1. they would find an accommodation of interests
2. an external party would impose a settlement
3. the situation will move closer to a war

I want to stipulate that neither country would come out of the war better off than it went in. Victory may be read into propaganda, and in who comes out the less worse off.

However, while "victory" in such a war is a fiction, advantage is indubitably the highest priority for each side right now. The strategy is to salvage honor, the tactic is to gain visible advantage.

Each side knows the other is going to play for advantage in this stalemate. The question is, which one of the two is the more likely to seek this advantage in a "preemptive strike?"

In my opinion, that depends on whether the players are prepared to allow for two or more rounds, or if they expect that the other is playing the last round. I seriously doubt that the latter will be true. It is most likely the former-- the civillian leadership on both the sides is building towards the next few rounds of negotiations. If that is true, then India will/should strike first-- India knows that if a skirmish breaks out, the US will strike hard at Pakistan to ensure that China stays out, and that Pakistan gives in quick, and the Afghan frontier stays the focus.

However, Pakistan may game the situation to see first-mover advantage-- If the US sides with India in a confrontation, they can count Pakistan in the "opposition" column for the next ten years. With this assumption, they will see a strike against India as a tool to force China to declare partisanship, and to call India's bluff.

The problem is, India is not bluffing, and we will have a war on our hands. So, for the sake of peace, India may want to strike first.

Now, I want to return to the statement that the attack on Mumbai was the first strike. What was it a strike against? Honor, India's, was involved, but was that a collateral casualty, or the prime target? I'd say it is the peace process that was the prime target. This peace process endangered the two most discredited Pakistani power centers, the militants and the military. Therefore, they sought to gain advantage by injecting Indo-Pak enemity.

If we buy this reasoning, then the more ways we can find to buld trust with, and go easy on, the despicable Mr. Zardari, and the more we work to weaken his enemies in the Paksitani power structure, the better we are avenged in the shortrun, and strengthened in the long.
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1 comment:

Anonymous said...

i left you a response over at the 'India - Pakistan Prepare For War' thread @that other blog you posted on.