With Donald Trump, don’t turn your back, don’t look away, and don’t blink. Part 28 of a series on game theory and politics, this one focusing on Trump’s shutdown debacle.
I should probably resist this urge to brag, but I can’t. In December, I promised my Dad that the partial government shutdown would end in the fourth week of January. The shutdown ended in the fourth week of January. After one compromise proposal to get his border wall approved, President Trump blinked. So how did I know that?
It’s easy: Trump always blinks, and exactly on schedule.
In this case the schedule was obvious:
• The first week of January, the new Congress would seat itself;
• The second week of January, the House Democrats would be occupuied with choosing their leader, who of course would be Nancy Pelosi;
• The third week of January, Pelosi would make it clear that the House Democrats would not negotiate while the government was closed;
• The fourth week of January, Trump would cave.
Before Trump shut down the government, he said he’d own the shutdown. Despite his immediate and in-character attempts to get everyone to forget it, everyone remembered it. The Trump Shutdown affected not just 800,000 federal workers and their families, but every air traveler, every food stamps recipient, every victim of a natural disaster, every national parks visitor, and everyone who wants safe food. Republicans want safe food too.
So, Trump didn’t get $5 billion for his wall by holding the government hostage. You’re clearly not surprised. But you may not know why it’s so unsurprising. It’s because ultimatums don’t work unless everyone wants them to work. If you’re going to make them, as Doctor Who says, don’t blink.
A social experiment called the ultimatum game makes it clear why, though it does so by doing the completely wrong thing from a game theory perspective. In the ultimatum game, two people are at a table. One is given an envelope containing 100 $1 bills. The one with the envelope can make one offer — the titular ultimatum — to split the money in any proportion with the other, and the other person can either accept or reject it. If they reject it, the envelope is taken away, and neither gets any money. So what do you think happens?
A straight game theory analysis says that people who are entirely rational will always split the money in whatever proportion the offerer offers. After all, the offeree will get no money if they reject the offer. It’s better to get some free money than no free money, right?
Well, no, it doesn’t turn out that way. Pretty much everyone will accept an offer of a $50-$50 split; that’s fair, and people like fair. A $60-$40 split is mildly unfair, but most people will accept that too; the person with the envelope has the envelope, and so folks will accept that they should get some advantage from being in the driver’s seat. But a $70-$30 split? That’s where it starts to break down. Anything at or below 30% is perceived as quite unfair, and people are willing to give up smaller amounts of money for larger amounts of pride. They want to punish unfairness. They don’t want to be losers. They want everyone to know they’re standing up for the little guy, which in this case is them. Even though they get nothing for doing so.
Is that irrational? Depends on your perspective. If you’re on the verge of starving, you’d probably give in to “rationality” and take the smaller amount. But if you’re not in extremis, it makes sense to you to stand up for yourself. That’s still rational to you. The game theorists might throw up their hands, but you’re not them. You’re a human being who wants to be treated with respect. Giving up a few caramel macchiatos to feel good about yourself is rational. In fact, the accepted strategy if I’m the person receiving the offer is to commit in advance to only accepting an offer of whatever I think is fair. If you offer me something I don’t think is fair, I stare you down and don’t blink.
What happens next is the interesting bit. After I reject your manifestly unfair proposal, we don’t have the envelope any more. But we do know who offered the other a wholly unacceptable outcome. So we’re done dealing. You can’t offer me anything even close to a 50–50 split now. Your ultimatum ended our negotiation. Now I have the power, and if a new envelope shows up, you’d better offer me most of it or you can kiss all of that cash goodbye. You are going to have to grovel just to get me back to the table.
So Trump threatened to kill Obamacare, and then he blinked. He ended the DACA protections, and then he blinked. He shut down the government, and Speaker Nancy Pelosi saw how often he blinked and she knew he would blink. So, she did the rational thing. When Trump showed up with an unfair offer — a short-term DACA extension in exchange for the wall funding— Pelosi decided she wouldn’t negotiate with a terrorist. She rejected the one offer he would ever get to propose. Then, she passed a bill to reopen the government, kicked it to the Senate, and six Republican senators voted for it.
Six may not sound like a lot. But it is. The 53 yea votes¹ meant just seven more Republican senators had to defect to overturn the shutdown on their own. They were ready to do it. Majority “Leader” #WheresMitcmMcConnell resurfaced from his hideyhole to read the Vice President the Riot Act over the shutdown. We were maybe one week out from open revolt. So of course #TrumpCaved. The president had bungled the one chance he would ever get. See, the ultimatum game is a brutal game. An act of unfairness hurts everyone. Play the game fairly or you don’t ever play it again.
Trump isn’t out of the chair yet, but he’s seriously wounded himself. With the Russia investigation ensnaring people closer and closer to him, with veteran Democrats lining up to crush him in 2020, with first-time House members itching to kick off his impeachment, with his approval ratings cratering, the very last thing he needed was to lose his remaining leverage. Sure, he can declare a national emergency over his fictional crisis, removing Congress from the table. But raiding the military budget to build a wall doesn’t sound like a winning move to me. OK, you shut down the Coast Guard for a few weeks? Maybe you can survive it. You steal the Army’s funding? Good luck with that.
You might think that if Trump was going to learn that ultimatums don’t work, he’d have done so by now. Trump is not what you’d call a learner. But we are. This week was the week America learned Trump was ignorable. It feels like a giant weight off our shoulders.
If we need to, Mr. Trump, we can just proceed as if we don’t have a president. Because when you walk away from the table, you shouldn’t be surprised if no one’s sitting there when you get back.
Or as the good Doctor might say: Blink and you’re dead.🔷
¹ I’m including Nevada’s Jacky Rosen, who missed the vote after busting her wrist.
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(This piece was originally published on PMP Blog! | The author writes in a personal capacity.)