## Friday, May 11, 2012

### Part One: Prisoner's Dilemma - How to Use It To Understand the Israeli Palestinian Conflict

Prisoner's dilemma is a simple game simulation that can be used to understand the impact of decision making between parties with conflicting interests.  The setup is simple:

Two prisoners who have conspired to rob a bank have been caught by the police.  The police do not have enough evidence to convict them of the full crime, but can convict them of a minor crime.  They are in separate interrogation rooms and each of them has a choice to make.  Cooperate with the police and get immunity or stay silent and only be convicted of the minor crime.

The dilemma is that there are four possible outcomes of this game.  If both prisoners decide to cooperate and keep silent, then they will
each spend a minimum amount of time behind bars.  If both prisoners decide to compete and talk to police, they will both be sentenced to the maximum amount of time in prison.  But, if only one talks to the police, he will go completely free.  You can see it illustrated in the chart below.
You can see that the best option for both of the criminals is to cooperate and spend only a total of one year in jail, but the problem is that each player's choice is affected by the other player's choice.  If only one competes then there is a chance that the criminal who does so will go completely free.  The worst option (from the perspective of the criminals) is when both of them take a competitive position and they get the maximum sentence for their crime.

Taken by itself this isn't a very useful concept, but what if we were to play this game 100 times under a slightly different setup?  This time we have two players, each can choose independently to cooperate or compete.  After each player chooses, the outcome of the game is determined by the following table:
If both players adhere to a perfect cooperation strategy (both players always choose to cooperate) then they will both end the game with 500 shekels for a total of 1000 shekels won by both players.

If both players adhere to a perfect competition strategy (both players only choose to compete), then they will both end the game with nothing.

If one competes the whole game and the other cooperates, the potential outcome is 1000 shekels for the competitive player and 0 shekels for the cooperative player.

But we are going to run this one round at a time.

Round 1:  Both players agree to cooperate, each gets 5 shekels
Round 2:  Both players agree to cooperate, each gets 5 shekels
Round 3:  Both players agree to cooperate, but player A competes, player A gets 10 shekels

The score is now Player A 20 shekels and Player B 10 shekels

Round 4:  Both players agree to cooperate, both players actually compete, no one gets any shekels
Rounds 5 - 10: Same outcome

At the end of round 10 the score is still 20 to 10 for a total of 30 shekels won out of a potential 100 shekels.  With competition, the players wasted 70 shekels.

Round 11:  Player A apologizes and says OK, really let's cooperate this time.  Both agree each gets 5 shekels
Round 12 -14: Same Outcome
Round 15: Player A competes, player B cooperates - 10 shekels for Player A

The score is now 50 to 30 shekels in favor of Player A - 80 shekels won, out of a potential of 150.

I won't go all the way to round 100, because I'm sure you get the point.

The more that the players cooperate the more of the potential benefits that they will realize.  The more they compete, more potential is wasted.  So why compete?  Because if you compete while the other side cooperates, you can theoretically get more than half of the potential pot, which is a win for you.  So, while the best strategy for both players is perfect cooperation, the best strategy for a single player is cooperate most of the time with a few areas of non cooperation that boost your take.... because if you constantly compete, the cooperative player will eventually catch on to that tactic and respond accordingly.

In other words, it pays to be slightly aggressive, but not so aggressive you provoke the other player to respond.  Don't misunderstand, I am not justifying this.  I am simply describing it as fact.

There are countless examples of this at play in the Israeli Palestinian conflict:

#### Rocket Fire

After operation Cast Lead, Hamas entered into a cease fire with Israel.  Since then Hamas has not fired any rockets into Israel... instead they have allowed other groups to occasionally fire rockets into Israel from Hamas-controlled Gaza.  Not every day, not all the time, and not to any great effect... but a few rockets here and there to remind the Israelis who is in charge in the Gaza strip.

(Understand I am talking strategically here... I am not intending to minimize the the suffering of anyone who has been hurt or killed by a rocket attack from Gaza.)

The Israelis have a choice - they can cooperate, by pretending that it is not really Hamas that is firing and taking no action or they can compete by striking Hamas targets in the Gaza Strip.  If they cooperate too much the rocket fire from Gaza increases until they decide to strike.  After they strike, if Hamas does not back down, then Israel is forced into a major action, like Operation Cast Lead.  Hamas is simply testing to see how much violence the Israelis will tolerate before taking action.  They are determining what percentage of cooperate/compete gives them the best advantage in the conflict... that is more strikes at Israel without any negative consequences.

Can they fire one rocket per week or one thousand per day without provoking an Israeli response?

#### Ambulances

Another example of this is medical cooperation.  Generally, combatants agree not to attack ambulances and medical personnel on the battlefield.  It also makes sense to allow ambulances to pass through the check points more freely than other vehicles.  The benefit is that more Palestinian lives are saved in Israeli medical facilities and that Israel can show this to the world as an example of their cooperation.

As long as both sides respect the rules of this agreement... such as don't transport weapons in ambulances ...it works well.  Cooperate - cooperate = win - win.

However, the minute you start loading guns into an ambulance and use it to smuggle combatants though checkpoints, you have crossed the line from cooperate to compete.

When the Palestinians do this Israel has a choice, cooperate and let the other side gain an advantage from unrestricted transport of weapons or compete and treat the ambulance like any other vehicle at the check point.  If they choose to compete the situation becomes a lose-lose.  Innocent people die because of the lack of medical attention and the Palestinians don't get to move their weapons and soldiers so freely.

The result is that the Palestinian strategy is to smuggle weapons in ambulances only occasionally... they get the benefit of transporting their weapons and people freely and Israel still chooses to cooperate and allow the medical vehicles through, because they value the ability to provide prompt medical attention to the Palestinians.

Again, they must test to see what level of competition the Israelis will tolerate.  Somewhere between 0 and 100 percent of the ambulances can be filled with weapons... they test to find out if the Israelis will tolerate 1 percent or 10 percent without shutting down the operation?

How many ambulances can be used as military transport without provoking an attack on ambulances?

#### Settlements

Settlements are another great example of this principle at work.  After Oslo, there was generally agreement that any final status decision would take into account "facts on the ground," that is settlement where Jews already live beyond the Green line.  More settlements mean more land for Israel in the final status agreement, so Israel has continued settlement activity.

Clearly, the Palestinians want the settlement activity to stop because it hurts their interest in the final negotiations.  After a settlement freeze expired, Israel refused to renew it even at the cost of straining the relationship with the United States... they went from cooperate (no new/expanded settlement) to compete (new/expanded settlements).

The Palestinians can now choose to cooperate and continue negotiations without any change in settlement activity or choose to compete and refuse to negotiate until a settlement freeze is in force.  As of right now, they have chosen to compete and refuse negotiations.

#### Conclusion

There are thousands more examples of this as the conflict is being played out in every level of society.  The cumulative effect of all of these decisions determines which player gets the upper hand.  You can use this as a tool to determine where events are heading in Israel.  There are always surprises, but they generally adhere to these rules.  An escalation of violence, until there is a determined response and then a return to the baseline of acceptable aggression.  It is a pattern you can watch play out over and over again in the news.

If you look at events from the objectives of each side and their strategy to achieve their objectives, it becomes easier to strip away the politics and determine what is really happening.

Next week I will write part two of this post where I will look at the moral implications and the Jewish approach to game theory.