India, China, US and Rousseau's game

What India and the US can learn from game theory as they try to tackle the China challenge

History moves in perfect circles. So it is not surprising that just under 50 years after cocking a snook at the US by signing a peace treaty with its arch enemy, the USSR, India has signed a similar one with the US yesterday.

Neutralising China was India's objective then and it is the objective now also.

In 1971, when the Indo-USSR treaty was signed, China was aligned with the US which at the time was opposing India.

Today China is aligned with Russia, and it is Russia that is acting against Indian interests. It supplies China with huge quantities of energy and arms.

It is important to describe this sort of thing in analytical terms, and not just in the usual jargon of international relations.

And what comes to mind is game theory, of which our ‘strategic’ thinkers are mostly and blissfully unaware. Their jabber therefore tends to be just that – jabber.

The truth is that long before even game theory was invented the Swiss philosopher, Jean Jacques Rousseau, in the mid-18th century told a story which captures the India-China-US relationship perfectly.

Rousseau said imagine that two guys go hunting for a big deer or stag. The two hunters can either work together or singly.

Rousseau said the two hunters, if they cooperate, can eat for a week. If they don’t cooperate all they get, perhaps, is a rabbit which they will gobble down in a day.

Or, worse, if they don’t get even a rabbit, they will go hungry.

The deer hunt

This story is a near-perfect illustration of how the US and India have behaved where China is concerned – wanting to hunt together since 2001 but, until yesterday, hunting singly and going nearly hungry.

The game that economists developed about 60 years ago further developed this idea. It is called the Stag Hunt. In it the hunters hide and wait for more than a day but the deer eludes them – exactly as China has done since 2001 in the face of all the talk about ‘containing’ it.

In Rousseau’s story both hunters are hungry and see a rabbit. Now they have a choice.

If one of them goes for the rabbit, kills it and eats it – a short term gain – the deer gets warned and leads both a merry dance.

This is what both India and the US had been doing till now – going for short term gains via cheap imports -- with China making them dance. It has gotten clean away while India and the US have been making do with rabbits.

Enter David Hume

Sometime later another philosopher, this time an Englishman, came up with many more examples of this kind of conflict of self-interest. In one of them two people are needed to row a very heavy boat to make it move. And that’s where the problem lies.

(L-R) US Secretary of Defense Mark Esper, US Secretary of State Mike Pompeo, India's Defence Minister Rajnath Singh and India's Foreign Minister S Jaishankar attend a joint press briefing in New Delhi on Tuesday

If one doesn't row it – and this is what has been happening between India and the US -- the other wastes his effort.

Thus, when Donald Trump was rowing, Narendra Modi was entertaining Xi Jinping, along with hopes that the latter would see the benefits of cooperation. That didn’t happen.

But thankfully both India and the US are rowing in the same direction since yesterday. The boat should move now.

In the jargon of game theory, there exist two pure-strategy Nash equilibriums in Rousseau’s story. In one both refuse to cooperate, which has been the story till now. In the other both cooperate, which will hopefully be the story henceforth.

Game theory says nothing about what would happen if one of the rowers changes his or her mind and stops rowing. It will probably be game, set and match to China.

Twitter: @tca_tca