Manageable Conflicts

Theses and thoughts about game theory, strategic games and conflict of interests (part 2, look the part 1). By Tomas Shelling, the book “Strategy of Conflict”.

So what is it, the Games Theory?

The games theory is the branch of mathematics studying mathematical models of decision-making in so-called conflict situations or in conflict conditions.

What implied under “conflict” here is such situation where different parties’ interests clash and struggle of interest takes place. Each of parties wants something different, or not anything others do want. Parties’ interests are whether opposite – and in this case such models are called antagonistic games, or don’t coincide each other, though, not opposite – and in that case it goes about “games with non-opposite interests”.

The set of all events around the conflict, their model, is called the game. Actions accessible for players are called strategies. Possible mediatory and final outcomes (results) of the conflict are called situations. Players’ interests are described through preferring these or those situations.

In other words, the game implies presence of several parties (two, at least) with their own proper goals and interests. Each of parties makes those decisions (i.e. chooses operating strategy) which would, as for this party, guarantee maximal gain or minimal loss, while the party itself is aware and understands that the result depends not only on its own actions, but on those of others. Important peculiarities of the game – interdependencies between decisions and actions, and parties’ decision-making in conditions of knowing nothing for sure (we wait for reaction of the opposite party after our move). Study and usage of games theory helps to choose best strategies considering at the same time the general notion on other participants of the game, their resources and their potential deeds.

So, what’s that – the games theory in real life?

It’s attaining your own goals (interests) in such situation when we have to make a counterbalancing action or some other actions with taking into consideration others’ interests, when our result we aspire to depends on actions of other parties. In such conditions our task is to move in such way which would provoke others to do what we need or what is gainful for us in result.

When our goals and interests psych each other out, or at least don’t interfere each other, and, by this, we don't interfere with others’ goal attainment, well, here is no conflict. What’s here is the field (ground) for agreement. But what about the game – it represents the situation of interests conflict where parties understand clearly this fact and struggle with each other in the way to attain each their own goals.

The game, in point of fact, is manageable conflict where parties, being aware of this fact, consciously take decisions and make their deeds to attain their goals. And to know how to play means to know how to act and move in conflict conditions. And note, please – to move successfully.

 What’s necessary to know for playing in real life?

It’s necessary to know managing behavior of other parties, or to know influencing on them in such way that they produce the decision we need or make some action which will let us get closer to our goal. That’s why, for playing or managing some conflict, it’s important to know what variables we control, and how these variables influence (impact) behavior of other parties.

One more very important skill – to “see” the game correctly. In other words, to know outlining its borders just even for self personally.

Borders can be directed by goals, time, number of players, set of interests etc. The game can be local – for example, negotiations about a contract concluding, when everything is to be decided at bargaining table. However, it can be long-term, when the final goal is compound or complex, or stays far away by time of its attainment. It’s like in the example of huge infrastructure project realization – where all negotiations, meetings, decisions, actions represent rounds of long-termed game, where we unite and connect for ourselves all the small local games and consider them as the game of many moves aimed to attainment of our project’s objective.

This skill of knowing to outline and manage the borders is alone able to make a significant impact on the game, while it permits to create a new game in the course of a big one, or to change its rules, by creating, in so doing, such interconnections which would deprive our opponents of their advantages and strengthen our position. Or when we understand that our loss in one little gamelet (for example, in one round of talks) is no loss in the matter of fact, but our strategic move permitting to gain more profitable positions in the global game and win more laurels in result.

How does the game pass? Mainly – as bargaining.

Any game represents open or hidden bargaining when each party estimates the current situation and makes the move in its turn, the move which depends much on what the other party has offered and made. By this, the move itself aims to make the other party come to decision which would be useful for the first one, or make some action which is necessary for the first. It will let attaining the final goal or get closer to it in result.

The bargaining itself may be open, like on example of negotiations, or hidden – like certain number of silent actions aimed to get the profitable position or some strategic advantages compared to other parties. Then, it’s to note one more important peculiarity of the game – communicational grounds and channels. Their presence, quality, information transmissivity, these channels management – all of that also enables getting advantages in game or weaken proper positions.

To be continued.

P.S. The next time I we’ll talk about the bargaining itself