Legislative Politics

The Game Theory of the Fiscal Cliff, or Why John Boehner May “Act the Diva”

Nov 26 '12

John Patty:

bq. In a nutshell, the uncertainty about Boehner’s bargaining position relative to his own caucus can generate sufficient incentives for him to “act the diva,” and seem to hold court in a fashion befitting LeBron’s act leading up to “The Decision.”  The simple explanation of the strategic incentives underlying this is that Boehner can utilize Obama’s uncertainty about Boehner’s bargaining ability to make it appear like, even if Boehner does “care at least as much as Obama” about resolving the fiscal cliff in an expeditious fashion, that Boehner can’t “deliver a deal” equal to Obama’s “reservation price” (or, in other words, that Boehner can’t get his caucus to agree to Obama’s demands).  The implicit value to Boehner is that Obama, on the margin, will give in a little to secure what he perceives as the marginal certainty of securing a deal from Boehner’s copartisans.  In other words, at the end of the day, as 2011 purportedly demonstrated, Boehner may ironically (but completely classically from a game theoretic vantage point) benefit from being able to portray himself (accurately or not) as not being able to corral his own troops.  ”Sir, I told them gruel was sufficient to survive the night, but they simply insisted they’d die without gruyère.”

More at the link.