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Game Theory in the News: Russia and Ukraine (Credibility)

Everyone wants their threats, promises, and assurances taken more seriously. But how?

Think in terms of certainty. If people were more certain you’d fire them, reward them, support them, or successfully compete against them, you’d increase your bargaining power.

We see this play out in the Russia Ukraine conflict. The more certain people are that Putin will use nukes, the more powerful they become as a threat. This is why people always fear fighting with the “crazy guy” in school.

How can you make your behavior more certain? A country can make an action more certain by publishing their stance all over the media. If they don’t act a certain way it will be very costly for their image.

For example, Russia has made recent threat of using tactical nukes under certain conditions. If those conditions trigger, and they don’t use the weapons, their credibility will take a hit. If they do use the weapons, people will continue taking their threats seriously. Thus, by making a threat, promise, or assurance public, you increase the stakes of the game. By publicizing clear goals, the power also increases. Anything that increases the probability that people will believe you because you’ve made it more costly to change your mind, will work.

Here are a few practical methods.

  • Use contracts. Written contracts are expensive to create, and expensive to break. By investing resources, you signal commitment.
  • Publicize your behavior. Companies often say things like “guaranteed lowest price.” Most people don’t take them up on price matching offers, but the publicized guarantee makes people purchase with confidence.
  • Take the response out of your hands. Dead man’s switches guarantee information will be released if you don’t press a button at a specific time. Journalists use this method when researching and reporting on dangerous cases. If someone kills them, the information gets published. Thus their threat to release the information if they don’t make it back, can be take seriously.
  • Be precise. One reason blockchain could eventually disrupt the legal system is because everyone can see the “rules,” and know exactly what will happen under different circumstances. Can you make the rules for you taking certain actions extremely clear, precise, and easy to access?

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