Post from March, 2014

Game Theory & Russian Expansion

Monday, 17. March 2014 10:09

Obma vs. Putin

With the ouster of the Russian-favored Ukranian President Viktor Yanukovych in a mass protest over his decision to affiliate with the Russian Federation rather than the European Union, Russian President Vladimir Putin has seized the opportunity to essentially claim the Crimeian pennisula, justifying Russian troops in Crimea on the transparent excuse of defending ethnic Russians, who constitute a majority in Crimea. Over the weekend and under the bootheel of a Russian occupation, there was a referendum in Crimea to secede from the Ukraine, which “passed” overwhelmingly. The United States has condemned the Russian agression and denounced the vote as illegal.

Tyler Cowen discusses this foreign policy crisis using game theoretic concepts. Specifically those of credibility, self-interest, and credible threats, i.e. nuclear deterence. Of particular interest is his discussion of tipping points – are we at a tipping point in foreign policy…where the world shifts back to a footing of greater violence to resolve conflicts? A question worthy of consideration, and game theory can help us better understand how this plays out in the real world.

Pointing out how the absence of a nuclear determence (Ukraine gave up its nuclear missles post-Cold War in a pact with Russia and the US that was supposed to ensure Ukrainian territorial integrity), and the lack of US credibility encouraged Russian aggression in the region. Cowen believes market forces may serve as a more effective deterent to Russian imperialism than it has in the past, given that the Russian economy is more tied to the global economy today (particularly through its oil and gas exports). He further argues that weakness in this particular instance may not undermine US credibility to a large extent, given the tenuous nature of our interest in the region. However, he ominously noes: “Still, there may be a net loss of credibility, perhaps a serious one, when the world is uncertain where American self-interest lies.”

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