Some thoughts about Trump’s press conference with Putin, as opposed to the G7 and NATO meetings, from a game-theoretic perspective. Yes, it’s time for some (more) game theory!

Consider the iterated prisoner’s dilemma (IPD), where two prisoners are being interrogated by the police. They have two choices: COOPERATE by remaining silent, or DEFECT by confessing. If both remain silent, they get a light punishment, since the police can’t prove anything. If one prisoner confesses while the other remains silent, the confessing prisoner goes free and the other faces the steepest punishment. If they both confess, they get a moderate punishment.

Axelrod, in The Evolution of Cooperation, shows that there are several strategies that one can use in the IPD and that these strategies vary by the amount of contact expected in the future. If none or very little future interaction is expected, then it pays to DEFECT, which basically means to screw your opponent.

If, on the other hand, there is an expectation of extensive future contact, the best strategy is some form of TIT-FOR-TAT, which means that you start by cooperating with your opponent, but if they defect, then you match that defection with their own. If they cooperate, then you match that as well.

This turns out to be a simple, clear strategy that rewards cooperative behavior and punishes jerks. It is powerful enough that a small cluster of TIT-FOR-TAT can invade a population of ALL_DEFECT. It has some weaknesses as well. We’ll get to that later.

Donald Trump, in the vast majority of his interactions has presented an ALL_DEFECT strategy. That actually can make sense in the world of real-estate, where there are lots of players that perform similar roles and bankruptcy protections exist. In other words, he could screw his banks, partners and contractors and get away with it, because there was always someone new.

But with Russia in general and Putin in particular, Trump is very cooperative. Why is this case different?

It turns out that  after four bankruptcies (1991, 1992, 2004 and 2009) it became impossible for Trump to get loans through traditional channels. In essence, he had defected on enough banks that the well was poisoned.

As the ability to get loans decreased, the amount of cash sales to Russian oligarchs increased. About $109 million were spent purchasing Trump-branded properties from 2003 – 2017, according to MccLatchy. Remember that TIT-FOR-TAT can win over ALL_DEFECT if there is prolonged interaction. Fourteen years is a long time to train someone.

Though TIT-FOR-TAT is effective, it’s hard work trying to figure out what the other player is likely to do. TIT-FOR-TAT’s weakness is its difficulty. We simply can’t do Nash equilibria in our heads. However, there are two cognitively easy strategies in the IPD: ALL_DEFECT, and ALL_COOPERATE. Trump doesn’t like to work hard, and he doesn’t listen to staff, so I think that once Trump tried DEFECT a few times and got punished for it he went for ALL_COOPERATE with the Russians. My guess is that they have a whole team of people working on how to keep him there. They do the work so he doesn’t have to think about it.

Which is why, at every turn, Trump cooperates. He knows what will happen if he doesn’t, and frankly, it’s less work than any of the other alternatives. And if you really only care for yourself, that’s a perfectly reasonable place to be.

Postscript – July 18, 2018

I’ve had some discussions about this where folks are saying “That’s too much analysis for this guy. He’s just an idiot who likes strongmen”. But here’s the thing. It’s not about Trump. It’s about Putin.

What do you think the odds were on Trump winning the election in 2015? Now how about 2003, when he started getting Russian cash to prop up his businesses? For $110M, or the price of ONE equipped F/A-18, amortized over 14 years, they were able to secure the near total cooperation of a low-likelihood presidential contender/disruptor and surprise winner.

This is a technique that the Russians have developed and refined for years. So you have to start asking the questions about other individuals and groups that are oddly aligned with Putin’s aims. Russia has a budget that could support thousands of “investments” like Trump, here and abroad.

That’s the key. And that’s my bet on why Mueller is so focused on finances. The Russians learned an important lesson in spending on weapons in the Reagan administration. They can’t compete on the level of spending. So it appears that they might be allocating resources towards low-cost social weaponry to augment their physical capabilities. If you want more on this, read Gerasimov’s The value of Science is in the Foresight.

Postscript 2 – July 21, 2018

A paragraph from a the very interesting New Yorker article by Adam Davidson:

“Ledeneva told me that each actor in sistema faces near-constant uncertainty about his status, aware that others could well destroy him. Each actor also knows how to use kompromat to destroy rivals but fears that using such material might provoke an explosive response. While each person in sistema feels near-constant uncertainty, the over-all sistema is remarkably robust. Kompromat is most powerful when it isn’t used, and when its targets aren’t quite clear about how much destructive information there is out there. If everyone sees potential land mines everywhere, it dramatically increases the price for anybody stepping out of line.”

It’s an interesting further twist on the ALL_COOPERATE. One of the advantages of nuclear MAD was that it was simple. That it could also apply to more mundane blackmail shouldn’t be surprising.