Probability of Success in a Negotiation

How will you rate your chances of success in a negotiation under the following circumstances:

1. You (the buyer) and the seller both expect the house to be worth something between $300,000 and $285,000, the former also the list price.


2. Each of you is biased to ward the end that serves your interests


3. a. There is an agency cost of 6% (typical in the US) or b. there is no agent involved?

I ran a Monte-Carlo simulation on this, and found that with agents the probability goes down to less than 1%, while without agents, there is a ~40% chance that the deal succeeds!

The following figure shows the utility curves for the principals in this simulation. I use Palisades @Risk software for this model.

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A New Political Strategy For Pakistan

The big question of the day for those thinking about Pakistan is:

What is the best way forward?

I have already conjectured that this failed state, built on a faulty (if excusable) premise, is likely to suffer partition under the weight of internal contradictions, and external meddling. I stick with that prognostication (not hope).

That said, there is the question of what is the best way to attempt to keep the country together. In the West, we keep mentioning "Democracy and human rights" as the way out of "the slide to militancy and anarchy". And yet, the lessons of History, and the recent learnings of Iraq, are different.

Peoples repeatedly, in Russia under Putin as in Iraq (in al Anbar) under Patreus, have welcomed an autocratic return of the rule of law, and shunned the chimera of week-kneed democracy.

So, next time we hear a pundit say that Pakistan must return to Democracy, we have to remind ourselves that eventually maybe, but the first need of our Pakistani brethren is for stability and development.

Pakistan is a unique country, and not really a nation, looking to be a state. Pakistan is a Military trying to stay in control, together, and relevant; it is a feudal system, self-consciously non-egalitarian, and struggling to preserve its privileges; it is also an Islamic republic, one seeking the approval of its mullahs, and of its Saudi controllers; but most immediately, Pakistan is a playground of US geopolitical interests. Unfortunately, Pakistan is only lastly a people possessed of a poorly-enunciated national view.

The best way forward for this aspiring-state is to first reconcile these competing interests. The only desirable, stable way forward will:

1. Sideline the Mullahs from statecraft
2. Keep the Military relevant, and strong
3. Allow the Fuedals to be secure, united, and on the side of the military,
4. Promote US agenda-- fight terror, keep peace in the region, AND
5. Serve the long term interests of Democracy

Note that, unfortunately but wisely, we have to put the interests of Democracy last.

One way to constitute a polity to meet these requirements is:

1. Institute a Presidential system
2. Give the Military-Generals electoral-college votes
3. Rotate the PM'ship between the provinces
4. Initiate public works that improve infrastructure and generate employment
5. Make education a top state priority
6. Fight terrorism along current lines

Pakistan can't accomplish all this by itself. It has strong competing power-centers (Islamists and a politicized military), it has institutions that are unequal to the purposes of nation-building (weakened judiciary, discredited constitution, week local-self government, and largely disenfranchised masses), and tremendous foreign intervention (Chinese, Saudi). Pakistan is all set to break-up and be carved-up.

However, we have here spelled one way to try and put the humpty-dumpty together again.

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Broad Prognostications

I am prognosticating an eventual division of Pakistan.

However, thinking through the various scenarios, and trying to project the logical outcome to two years out, I think it seems inevitable that Pakistan will face partition between Punjab and another enitity(ies).

While that end result (partition) I feel reasonably sure about, I am strangely unsure as to what road leads to that end. I can see upswing in militancy, military crack-down on the populace, internal strife within the army, and a possible exodus to India. Pakistan has three puppeteers-- US, China, and Saudi. It has two nemses-- India and Iran/Afganistan. As US loses voice within Pakistan (as it will when a military crackdown ensues), China and Saudi (less supportive of democracy) will support the brutalities. The US will sway toward India. India, to prevent the exodus, and under reflexsive simulatneous pressure from China, will go into an escalated defensive posture. If the US messes with Iran, it gains Russia's wrath, whereas in supporting India against Sino-Pak, I think these two powers can coordinate.

As the region heats up, dismembering Pakistan will seem as the best option to the super-powers. Sindhu-desh will welcome the option, long tired of Punjabi bullying, and capable of supporting themselves through trade. Punjabi-dominated military will raise heckles, and the nuclear assets will need to be quaranteened.

India may be made to pay a sacrifice to appease Pakistan, and help in Nuclear quaranteen. Possibly, China will claim parts of Kashmir or Nor-east openly.

Pakistan divided, India will accept such a sacrifice. Military alliance between Punjab-China will sought to be balanced by one between Sindh and India. Sphere: Related Content