Trump's Game of Chicken
tags: Trade War,Tariff
David P. Barash is an evolutionary biologist and professor of psychology emeritus at the University of Washington; his most recent book is Through a Glass Brightly: Using science to see our species as we really are (Oxford University Press), 2018.
Those of us who worry about President Trump starting a shooting war might well be relieved that the focus, for now, is on trade rather than explosions. Clearly, trade “war” is a figure of speech, a metaphor. A better one is Game of Chicken, as analyzed by mathematical game theorists. Admittedly, Chicken also isn’t a perfect model for the current US-China imbroglio, but it can be illuminating.
Like war and generals, or politics and politicians, Games of Chicken are too important to be left to the game theorists alone. So here is a primer.
What happens when a chicken, instead of crossing the road, decides to run headlong into another chicken, who is similarly determined? The result could be a Game of Chicken, if certain conditions apply.
Consider the classic Game of Chicken. Two cars speed toward each other. Each driver can do one of two things: Swerve or go straight. In a trade war, swerving means giving in the other’s demands (i.e., for China, buying more American-made products, and for the US, abandoning its new tariffs).
To win, you must go straight; the one who swerves is the “chicken.” If both drivers swerve, neither wins but neither suffers relative to the other. But here is the crunch, literally: If both drivers go straight – i.e., if the trade war goes on, injuring both economies - both lose.
It is said that Games of Chicken were first played by California teenagers during the 1950s, although that may simply be an urban legend. The philosopher Bertrand Russell, however, saw a gruesome parallel with nuclear brinkmanship: Each side wants the other to back down, although neither is willing to do so itself and so, a head-on collision beckons.
“We’re eyeball to eyeball,” said Secretary of State Dean Rusk in 1962, as the Cuban Missile Crisis passed its near-apocalyptic outcome, “and I think the other fellow just blinked.” As games go, Chicken can be serious, and deadly. In nuclear confrontations: fried chicken. Trade wars, fortunately, are less dire, but nonetheless consequential.
Mutual swerving seems rational, but if you think the other fellow is a swerver the temptation is to go straight. The rub is that the other driver is thinking the same thing, and Trump claims – for the most part, falsely - that the US has made a history of swerving, so perhaps China expects the US to swerve once more. Moreover, Trump has claimed that trade wars are “easy to win,” suggesting that he expects China to do the swerving. And by the rules of the game, if either side is convinced that the other will swerve, then you could win by going straight. Should you therefore go straight? Not if the other player does the same. So the “game” often boils down to a matter of communication, or rather manipulation: trying to get the other side to swerve.
Accept, right off, that there is no way to guarantee victory. The best either player can hope for is to improve the odds of inducing the other one to buckle. Toward that end, there are many tactics, none especially appealing. Start with reputation. If you are known as a nonswerver, your opponent is bound to take that into account. Not surprising, national leaders have long been concerned that their country be known to stand by its commitments; Trump, by contrast, has distinguished himself by being capricious and unreliable, not a good prognostic sign.
Reputation can be burnished in several ways, like cultivating an image of being literally crazy, or, better yet, suicidal. Whether actually irrational or simply faking it, there is a payoff to convincing your opponent that you have taken leave of your senses. Chalk one up for Trump.
Yet another variant involves convincing the other player that you are unwilling or – better yet - literally unable to swerve. The logical, but nonetheless bizarre consequence, suggested in the 1960s by that bizarrely logical nuclear strategist, Herman Kahn, is to wait until you have reached high speed, and then throw the steering wheel out the window, showing the other driver you can’t swerve, which generates a contest to see who can toss out the steering wheel first! Maybe US success would be enhanced if Congress passed legislation requiring Trump not to back down, although given Republican distaste for tariffs, this seems unlikely.
There are other ways of convincing the oncoming driver that you aren’t going to swerve. Your determination to go straight may depend on your desire to be victorious, and Trump has made it clear that for him, being a “winner” trumps all. That might help.
A final tactic: Drive a large and imposing vehicle. If an armored cement truck is confronting a VW Beetle, who backs down? Given that the US economy is pretty strong – at least for now – this might also give Trump an advantage, although China’s economy has, if anything, even more current momentum.
The logic of Chicken is downright illogical, which brings up the advice offered by a high-powered Defense Department computer, playing a game of Global Thermonuclear War in the 1983 movie, WarGames: “The only winning move is not to play.”
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