Game theory explains why AOC and other progressives should reject Nancy Pelosi and tank the Senate's bipartisan infrastructure bill

Alexandria Ocasio-Cortez, a Democratic-NY Representative, speaks at an event outside Union Station on June 16, 2021 in Washington DC. Ocasio-Cortez was joined by Senator Kirsten Gillibrand (D-NY), and Rep. Seth Moulton, both Democrats. Win McNamee/Getty Images
The impasse between centrist Democrats and progressive Democrats is reminiscent of the classic prisoner's dilemma in game theory.

Research has shown that cooperation until betrayed is the best strategy in this situation.

The plan to move both bills together was abandoned by the centrists, so game theory suggests that progressives have every right to be concerned about their own defection.

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The Democrats are stuck in negotiations over two massive spending bills. A classic problem in game theory could help to clarify the nature of their quarreling.

Two bills are at stake: a bipartisan, $1 trillion roads-and bridges infrastructure deal that is favored by the centerist wing of the party, and a $3.5 trillion social spending bill that is backed by progressive faction.

The Democratic leadership reached a deal with the Senate to pair the bipartisan infrastructure bill with the larger social spending reconciliation bill. This bill includes many of the top priorities for progressives. The two parties agreed to work together on their pet bills.

The House of Representatives will vote on Thursday on the bipartisan agreement. However, progressives such as Rep. Alexandria Ocasio Cortez and Sen. Bernie Sanders are expected to oppose the bill. This is after Speaker Nancy Pelosi seemed to separate the two spending programs under pressure from the centrist wing of her party.

If you have ever played a boardgame, the progressives' changing of heart is logical. It's a classic strategy to solve a fundamental problem within game theory.

There are 4 outcomes to the prisoner's dilemma

In a situation such as this, there are four outcomes: You win and your opponent loses; your opponent wins and you lose; some compromise occurs where both of you win; or you both lose.

The following is a possible ranking of the outcomes for the progressives and the centrists: Passing the complete bill of each side without compromise would be the most desirable outcome. A pair of compromises would be second-best, where your side gets the most of their demands and the other side gets all of them. Third-best for either side is a non-bill passing at the moment, which would theoretically open up the possibility of continuing negotiations. The worst scenario would be for the other side to pass their bill while you lose any leverage.

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This set of incentives results in the classic game theory dilemma of the prisoner’s dilemma. There are two sides to this dilemma. Each must choose whether they will cooperate or betray their counterparts. Both sides can cooperate to achieve a positive outcome, but both can betray the other. One side may betray the other, but it will result in the best outcome for them and the worst outcome possible for their counterpart.

This is the basic structure of the strategy. You should always betray your enemy.

You can avoid the worst outcome by betraying your rival. You will get the best outcome if your opponent sticks to the agreement. However, if they betray you, it's still possible to get some of your desired outcomes. This leads to the frustrating conclusion that both sides must betray each other in order to achieve the best outcome. However, they would both get a better result if they cooperated.

The 2008 Batman film "The Dark Knight" is a classic example of pop-culture. The film's climax sees the Joker setting off bombs on two boats of prisoners and a ferry full of commuters and giving the detonator to the other boat to each group. The evil villain hopes that each group will blow up the other, but Gotham City citizens decide to cooperate and leave both boats floating.

This conclusion that it's always better to betray your opponent is only valid if the situation is unique and temporary. It is possible to feel more inclined towards cooperation if you deal with the same counterparty repeatedly, as the Democratic party and the Republican side.

This is the basis of Progressives' "tit-for–tat" approach

A team of computer and political scientists devised a tournament to simulate repeated encounters similar to the one shown above. The best strategy for avoiding the prisoner's dilemma is to keep the same people running it over and over is what they call "tit-for tat."

This strategy is friendly but not pushy. You start by cooperating with new opponents and continue on to do the same thing on subsequent rounds. You simply continue to cooperate with your cooperative partner and mutually receive a modest reward. Then you punish players who defect.

It seems that progressives are using a titt-for-tat approach to negotiating the spending bills.

Initial agreement by both sides was for them to vote in tandem. This suggests a positive outcome to our prisoner's dilemma. However, in August, centrists resisted the plan and pushed to pass the bipartisan legislation before moving on to the reconciliation bill.

This seems to be a departure from the agreement by the centrists. The logic of tit for tat means that the progressives are forced to defect to the bipartisan bill. The progressives who balk at this week’s vote are simply doing what game theory says they should.

Business Insider has the original article.