Game Theory: Forecasting human behaviour | The Economist
- 5 years ago
Software programs based on game theory are being used to predict political outcomes and track down terrorists
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After 30 years in power the ousting of Egyptian President Hosni Mubarak caught many observers by surprise. But Mr. Mubaraks downfall had been predicted by a computer model back in May of 2010, well before the first stirrings of the Arab Spring.
The software model was designed using game theory, a branch of mathematics that aims to quantify human behavior and predict the outcome of events.
It was developed by Dr. Bueno de Mesquita a professor at New York University who runs a consulting firm called mesquita & randle. He offers advice to foreign governments, America's State Department, Pentagon, and intelligence agencies, as well as privately.
His success rate has been impressive. Five years before the death of Iran's Ayatollah Khomeini in 1989, Mr. Bueno de Mesquita correctly named his successor - a prediction that ran against the prevailing thinking of the time.
Today, there are several consulting firms using game theory to make strategic predictions. The underlying principle of game theory is a belief that people and organisations act in their own best interest in most situations and that their actions can be predicted.
To run his model Dr. Bueno de Mesquita creates a game in which every participant in a negotiation becomes a player. The outcome is determined by the successful jockeying for position of the players. In diplomacy or business negotiation there might be a handful of leaders, but each carries with him dozens of influencers including supporters, advisors, organizations, and voting blocs. All of the possible interactions between them must be taken into account. With each additional player the number of potential interactions soars. With only 10 players it reaches beyond three million.
Each player is reduced to just four qualities - their desired goal, their flexibility, their attention to the problem, and their influence. The computer model then considers the options open to each player, determines their likely course of action, evaluates their ability to influence others, and predicts the course of events.
Dr. Bueno de Mesquita can't share his current work but his student projects use the same method. One of his groups recently studied nuclear talks with North Korea under Kim jong-un, the current leaders son. Using Barack Obama, Kim jong-un and many leaders and influencers of the six-party talks as inputs, the group produced some interesting predictions.
their model showed that though the talks they designed would quickly fail, a stronger alliance between Russia and South Korea would reduce tensions overall. They searched for a reason to produce such an alliance and found it in an oil pipeline considered for construction between the two countries.
Offering to build the pipeline through North Korea, they suggested, would bring a more desirable outcome to the pro-western players nudging the North Koreans towards a freer system or providing fiscal incentives.
Game theory has also been used by the intelligence community for decades. Guillermo Owen is a professor at the Naval Postgraduate School in Monterey California. He wrote one of the original books on game theory and helped found the discipline. Since 2003 he's helped the United States Air Force find suspected terrorists in Afghanistan and Pakistan.
In one of his models Owen breaks a geographical region where a target might be hiding into cells one might see on a game board. He assigns probabilities to each cell and examines them based on certain characteristics, such as the targets ability to hide in the cell, the willingness of people to protect him, and how easy it is for him to move around. By running the game the hiders most probable location becomes clear.
In a recent application, Owens program was aided by intelligence about the behavior patterns of a particular hider who enjoyed both watching movies and using a ham radio.
While Owens hide-and-seek program has a very specific application in the intelligence community, he imagines that game theory programs will be created for consumer applications in the near future. This is a view that Dr. Bueno de Mesquita shares as well.
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After 30 years in power the ousting of Egyptian President Hosni Mubarak caught many observers by surprise. But Mr. Mubaraks downfall had been predicted by a computer model back in May of 2010, well before the first stirrings of the Arab Spring.
The software model was designed using game theory, a branch of mathematics that aims to quantify human behavior and predict the outcome of events.
It was developed by Dr. Bueno de Mesquita a professor at New York University who runs a consulting firm called mesquita & randle. He offers advice to foreign governments, America's State Department, Pentagon, and intelligence agencies, as well as privately.
His success rate has been impressive. Five years before the death of Iran's Ayatollah Khomeini in 1989, Mr. Bueno de Mesquita correctly named his successor - a prediction that ran against the prevailing thinking of the time.
Today, there are several consulting firms using game theory to make strategic predictions. The underlying principle of game theory is a belief that people and organisations act in their own best interest in most situations and that their actions can be predicted.
To run his model Dr. Bueno de Mesquita creates a game in which every participant in a negotiation becomes a player. The outcome is determined by the successful jockeying for position of the players. In diplomacy or business negotiation there might be a handful of leaders, but each carries with him dozens of influencers including supporters, advisors, organizations, and voting blocs. All of the possible interactions between them must be taken into account. With each additional player the number of potential interactions soars. With only 10 players it reaches beyond three million.
Each player is reduced to just four qualities - their desired goal, their flexibility, their attention to the problem, and their influence. The computer model then considers the options open to each player, determines their likely course of action, evaluates their ability to influence others, and predicts the course of events.
Dr. Bueno de Mesquita can't share his current work but his student projects use the same method. One of his groups recently studied nuclear talks with North Korea under Kim jong-un, the current leaders son. Using Barack Obama, Kim jong-un and many leaders and influencers of the six-party talks as inputs, the group produced some interesting predictions.
their model showed that though the talks they designed would quickly fail, a stronger alliance between Russia and South Korea would reduce tensions overall. They searched for a reason to produce such an alliance and found it in an oil pipeline considered for construction between the two countries.
Offering to build the pipeline through North Korea, they suggested, would bring a more desirable outcome to the pro-western players nudging the North Koreans towards a freer system or providing fiscal incentives.
Game theory has also been used by the intelligence community for decades. Guillermo Owen is a professor at the Naval Postgraduate School in Monterey California. He wrote one of the original books on game theory and helped found the discipline. Since 2003 he's helped the United States Air Force find suspected terrorists in Afghanistan and Pakistan.
In one of his models Owen breaks a geographical region where a target might be hiding into cells one might see on a game board. He assigns probabilities to each cell and examines them based on certain characteristics, such as the targets ability to hide in the cell, the willingness of people to protect him, and how easy it is for him to move around. By running the game the hiders most probable location becomes clear.
In a recent application, Owens program was aided by intelligence about the behavior patterns of a particular hider who enjoyed both watching movies and using a ham radio.
While Owens hide-and-seek program has a very specific application in the intelligence community, he imagines that game theory programs will be created for consumer applications in the near future. This is a view that Dr. Bueno de Mesquita shares as well.
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The Economist videos give authoritative insight and opinion on international news, politics, business, finance, science, technology and the connections between them.