Fascinating. “Israel’s Conflict as Game Theory,” by Yisrael Aumann, who won the Nobel Prize in Economics in 2005 for his work on analyzing conflicts using game theory. This piece was posted at Israel Defender on October 23:
Two men–let us call them Rick and Steve– are put in a small room containing a suitcase filled with bills totaling $100,000. The owner of the suitcase announces the following:
“I will give you the money in the suitcase under one condition…you have to negotiate an agreement on how to divide it. That is the only way I will agree to give you the money.”
Rick is a rational person and realizes the golden opportunity that has fallen his way. He turns to Steve with the obvious suggestion: “You take half and I’ll take half, that way each of us will have $50,000.”
To his surprise, Steve frowns at him and says, in a tone that leaves no room for doubt: “Look here, I don’t know what your plans are for the money, but I don’t intend to leave this room with less than $90,000. If you accept that, fine. If not, we can both go home without any of the money.”
Rick can hardly believe his ears. “What has happened to Steve” he asks himself. “Why should he get 90% of the money and I just 10%?” He decides to try to convince Steve to accept his view. “Let’s be logical,” he urges him, “We are in the same situation, we both want the money. Let’s divide the money equally and both of us will profit.”
Steve, however, doesn’t seem perturbed by his friend’s logic. He listens attentively, but when Rick is finished he says, even more emphatically than before: “90-10 or nothing. That is my last offer.”
Rick’s face turns red with anger. He is about to punch Steve in the nose, but he steps back. He realizes that Steve is not going to relent, and that the only way he can leave the room with any money is to give in to him. He straightens his clothes, takes $10,000 from the suitcase, shakes Steve’s hand and leaves the room humiliated.
This case is called ‘The Blackmailer’s Paradox” in game theory. The paradox is that Rick the rational is forced to behave irrationally by definition, in order to achieve maximum results in the face of the situation that has evolved. What brings about this bizarre outcome is the fact Steve is sure of himself and doesn’t flinch when making his exorbitant demand. This convinces Rick that he must give in so as to make the best of the situation.
The Arab-Israeli Conflict
The relationship between Israel and the Arab countries is conducted along the lines of this paradox. At each stage of negotiation, the Arabs present impossible, unacceptable starting positions. They act sure of themselves and as if they totally believe in what they are asking for, and make it clear to Israel that there is no chance of their backing down.
Invariably, Israel agrees to their blackmailing demands because otherwise she will leave the room empty handed. The most blatant example of this is the negotiations with Syria that have been taking place with different levels of negotiators for years. The Syrians made sure that it was clear from the beginning that they would not compromise on one millimeter of the Golan Heights.
The Israeli side, eager to have a peace agreement with Syria, internalized the Syrian position so well, that the Israeli public is sure that the starting point for future negotiations with Syria has to include complete withdrawal from the Golan Heights, this despite its critical strategic importance in ensuring secure borders for Israel.