Tuesday, December 29, 2009

arvind panagariya: how over-eager india screwed up in copenhagen

dec 29th, 2009

this business of india's unilateral concessions has to stop. it is simply idiotic, eg. the unilateral 'no first-strike policy'.

once again, china pulled a fast one on india's easily-tricked negotiators. these people neither have a long-term strategy, nor are they taught game theory.

long-term bilateral relationships can be modeled as a repeated prisoners-dilemma game. it has been demonstrated that the best strategy is "tit for tat". that is, if the other party cooperates, you cooperate the next time. if the other party betrays you, then you betray them the next time.

however, india's 'strategy' is: co-operate all the time, regardless of being betrayed. this ends up being a great strategy for china, because they keep betraying india, and there is no consequence to them. and they always win in the prisoners-dilemma, because the best outcome is if one betrays and the other party cooperates.

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