A Game-Theoretical Analysis Of The US-China-North Korea ‘Standoff’
Via University of Maryland’s Robert H. Smith School of Business,
ZeroHedge.com
May 5, 2017
Amid the ramped-up diplomatic and military pressure on North Korea, there is something else at play, says Charles E. Olson, professor of the practice at the University of Maryland’s Robert H. Smith School of Business. It’s an exercise in game theory.
Last weekend, as North Korea launched a ballistic missile, U.S. Secretary of State Rex Tillerson was at the United Nations, urging member nations to adopt new sanctions against North Korea for seeking to advance its nuclear ambitions despite repeated admonitions from the UN. And President Donald Trump was turning to Twitter to portray the latest launch – which exploded shortly after takeoff – as a provocation against North Korea’s most important ally, China.
“This is a perfect game-theoretic situation,” says Olson, who teaches in the logistics, business and public policy department and is director of the Business Honors Program. The central players are the United States, North Korea, China, South Korea, Japan and Russia.
Game theory is a wide-reaching study that can describe and model how human beings will behave, particularly in response to the actions of other human beings. It’s a sort of chess-game thinking. And its basis is essentially this: Your interests depend not just on the decisions you make, but also on the decisions that other people make. In game theory, you choose your moves based on how you expect your competitors to respond to your moves.
This particular game has spanned decades. “I’m just about 75 years old,” Olson says. “But I remember reading about the battling between the U.S. and China and Korea in the Wausau [Wis.] Daily Herald as a kid when I was walking around, delivering the newspaper on my paper route.”
Today, the stakes are higher than ever. North Korea, in addition to stockpiling artillery weapons near the Korean demilitarized zone, has recently been conducting a spate of nuclear tests and missile launches, suggesting that it might be getting nearer to developing a nuclear-tipped missile capable of striking enemies as near as Tokyo or as far as the United States.
“It’s not a pleasant thing to try to force the hand of North Korea,” Olson says. “But it’s going to get more unpleasant as time passes, as the weapons inventory continues to build.”
In typical cooperative game theory fashion, Donald Trump has aligned himself with another player – China, which is believed to have significant leverage as Pyongyang’s top trading partner.
“He’s trying to see what he can do with China to up the pressure, add more sanctions, so that North Korea won’t be able to continue in its weapons development,” Olson says.
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