Resetting Relations with Russia?

Author: Drew Masada

While high-level game theory is not for the faint of heart, or math-impaired, many of its basic principles are useful for understanding the real world of international relations. At its essence, game theory is merely a simplified model of a two-person interaction in a strategic environment. Working from a set of explicitly held assumptions about the nature of the universe in which the strategic interaction occurs, one can find an optimal strategy that maximizes the benefit to a particular actor. There are many different ways to view the state of the universe, such as: whether actors have complete information or incomplete information; whether the interaction between actors occurs only once or if it will occur indefinitely over time; whether cooperation is rewarded or punished; and whether signals are costly or just cheap talk.

This scenario will use the basic ideas of game theory in order to map out one possible explanation of the Obama Administration’s attempts to reset relations with Russia. One possible interpretation of the United States’ recent change in position regarding the Ballistic Missile Defense (BMD) systems in eastern Europe is that it is a costly signal to Russia, indicating their willingness to accept audience costs (domestically and from their eastern European allies) in order to begin a better relationship with Russia. The scenario assumes that while the Obama Administration knows what kind of actor it is, Russia does not. In addition, it will be assumed that this is a cooperative game, in which cooperation between the United States and Russia will result in a higher payoff for both than would be gained by non-cooperation. Also, in this scenario, as in real life, the interaction is iterated, i.e., those interactions will occur continuously over an indefinite period of time. Finally, the United States’ change in policy will be labeled as a costly signal. The Obama Administration’s new stance on BMD systems in eastern Europe opened them up to attacks in the domestic arena from those who felt that we were appeasing Russia and not protecting our allies, as well as from allies in the region who lost face after making a political effort to support the plan to their own constituencies.

Imagine a scenario in which there are two possible states of nature: either the United States is humble in its foreign policy or it is not, as evidenced by the H+ and H- labels coming from the central circle that represents Nature. In each possible state of nature, the United States, in the square boxes, has two possible actions: either to send a costly signal, or engage in cheap talk, labeled S+ and S-. Now Russia does not know the true nature of the United States, but can observe the signals that the United States sends.

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Russia’s response will depend upon two factors. First, is Russia’s belief as to whether the United States is humble or not. Second, is Russia’s belief as to what strategy each type of United States will pursue. For example, if Russia believes that there is a .7 likelihood that the United States is humble and a .3 likelihood that the United States is not humble, and believes that a humble United States will always make a costly signal and an arrogant United States will choose not to, Russia will be more likely to believe that they are interacting with a cooperative United States and thus reciprocate the costly signal with cooperation. However, if it is equally likely that the United States is humble or not and an arrogant United States will mix its strategies, choosing to cooperate or not in a random fashion in order to make its type indistinguishable from a humble United States, Russia has no clear best action.

Besides the fact that it is a cooperative game, where cooperation is rewarded with a higher payoff, it is an iterated game. One famous game theory experiment found that when playing over an indefinite period of time, the most successful strategy is to mirror the last move of the other player. Formally, the strategy is called Tit for Tat. Thus, as in real life, if two actors were locked into a cycle of non-cooperation, and if one actor is able change its behavior for one round and make a gesture of cooperation and it reciprocated by a cooperative action, theory suggests that the interactions would then reset to a cooperative relationship. That said if Russia were to respond to the United States’ signal by non-cooperation, such action is more likely to lock -in a non-cooperative relationship for the foreseeable future.

Theory aside, the United States and the Obama Administration in particular have shown through changes in culture, language, speeches, policies, and actions that they intend to pursue a more conciliatory, more engaged relationship with other nations. Secretary of State Clinton famously traveled to Russia with a gift of a button that was intended to represent a “resetting” of relations between the two countries after years of friction over the expansion of NATO, the war in Georgia, and the planned BMD system in Eastern Europe. While the Secretary of State’s mission was a wise use of soft power to re-engage the Russians, perhaps this latest change in policy on the BMD system in Eastern Europe is yet another attempt by the United States to show the Russians that they wish to foster better relations in the future. However, the Obama Administration’s strategy might be in error. If Russia stands to gain more from non-cooperation and does not believe that amiable relations between it and the United States have to continue in the future, then they have very little incentives to engage in cooperation. But as a whole, the number of common issues that both the United States and Russia have an interest in resolving suggests that cooperative, long-term interaction may be the best outcome for both nations.