Geoffrey Hale Political Science 3170 University of Lethbridge September 24, 2010
Dec 25, 2015
Game Theory and International NegotiationsBasic concepts“Win-sets”, negotiating room, and negotiating
leverageMaking agreements “stick”
Voluntary and involuntary defectionFactors affecting “win set” sizeWhy it matters
Examples and applications
Basic Concepts: Two-Level GamesTheory holding that international negotiations involve
bargaining on at least two levelsbetween or among national governments, andbetween government leaders (or negotiators) and other
domestic political actors including actors within their own governments and/or actors among relevant societal groups.
Successful negotiations require:agreement between negotiators / countries on the basis
of mutual (but not necessarily equal) benefit; capacity of each government secure internal ratification
of the agreement according to its relevant (private or public) political processes.
Basic Concepts: Two-Level GamesLevel 1 Game
Country “A” Country “B”Political leader ---------------------- Political leaderand senior advisors and senior advisors
| |Level 2 Game Level 2 GameCountry “A” Country “B”Political leader / sr. negotiator Political leader / sr. negotiator+++++++++++++++++++++++ ++++++++++++++++++
+++Internal political / b’cratic actors Internal polit. / b’cratic
actors+++++++++++++++++++++++ ++++++++++++++++++
+++External political / societal actors External political / societal
actors(supportive / conditional / opposed) (supportive / conditional / opposed)
Key assumptionsStates are not unitary actors in negotiations
Negotiators’ preferences, bargaining conditions are not fully transparent
ImplicationsCritical to have understanding of other parties’
negotiating contexts, priorities, especially in multi-party negotiations. (Easier said than done.)
Key Assumptions IIStates are not unitary actors in negotiations
Negotiators’ preferences, bargaining conditions are not fully transparent
Bargaining environment may be dynamic subject to change based on external political or
policy environments for negotiations, or based on internal dynamics (winners / losers / unforeseen issues) of negotiations themselves.
ImplicationsNegotiations not “over” until everyone agrees.Agreement does not necessarily imply
ratification.
Key assumptions IIINegotiators may use bargaining dynamics to influence their
own domestic actors BUTDomestic political institutions play vital role in structuring
internal dynamics of initiating, conducting, and/or ratifying international institutions. Ratification processes may be formal, public OR private,
internal to government (or branches of government) OR combination of both
Implications:Usually multiple agendas present at bargaining table.Negotiations may involve element of “bluff” involving
leaders’ capacity to mobilize domestic support, overcome opposition (internal and external).
Political leaders with greater domestic autonomy may be at relative disadvantage compared with more politically constrained negotiating counterpart.
Key assumptions IV States are not unitary actors in negotiations
Negotiators’ preferences, bargaining conditions are not fully transparent
Bargaining environment may be dynamic subject to change based on external political or policy
environments for negotiations, or based on internal dynamics (winners / losers / unforeseen issues) of negotiations themselves.
Negotiators may use bargaining dynamics to influence their own domestic actors BUT
Domestic political institutions play vital role in structuring internal dynamics of initiating, conducting, and/or ratifying international institutions.
Domestic actors in each country may attempt to take prior or ongoing political actions to change terms on which negotiators are likely to be able to ratify any agreement.
“Win-sets”The collection or set of agreements among
negotiators that would obtain ratification by their respective constituents in an “up-or-down” vote.
Win-sets for each “Level 1” party must overlap
The smaller the win-sets for each party, the greater the likelihood that negotiations will break down.
“Win-sets” IIThe collection or “set” of agreements among
negotiators that would obtain ratification by their respective constituents in an “up-or-down” vote.
Win-sets for each “Level 1” party must overlap to some degree
The smaller the win-sets for each party, the greater the likelihood that negotiations will break down.
“Win-sets” IIIThe relative size of each country’s “win-sets” will affect
the distribution of the joint gains from the international bargain.\
Negotiators with smaller win-sets can use risk of non-ratification to shape process of negotiation, extract more concessions from countries with larger “win-sets”Size of win-sets may be shaped by government’s
relative autonomy from domestic political interests, perceived gains from agreement vs. non-agreement, perceived costs of not securing agreement.
Xm-------------[--------[--------]-------[---------------Ym Y1 Y2 X1 Y3
Max. possible Max. possible gains for X gains for Y
“Win-sets” IVScope of negotiations will affect size of “win-
sets”Broad negotiations among relatively limited
number of parties increases potential for trade-offs, bargains leading to agreements.
The growing in the number of negotiating parties increases the difficulties in achieving agreement on large-scale agreements Multi- or plurilateral agreements more likely to be
achievable on more narrowly focused issue clusters (fewer ‘external’ linkages)
Explains specialization, decentralization of international economic institutions
Key factors affecting size of “win-sets”“Level 2” Preferences and CoalitionsDistribution of political, societal interests actively
or conditionally in favour of, opposed to potential agreement relative size of enthusiastic “internationalist” coalition
vs. resolutely “nationalist” or “isolationist” coalitions relative homogeneity vs. diversity of domestic
interests potentially affected.interests may exist independently in each country or
cooperate across national borders.Relative intensity of coalitions likely to gain or lose
from agreement.Capacity of governments to negotiate trade-offs to
neutralize or reconcile potential opponents
Key factors affecting size of “win-sets”“Level 2” Preferences and Coalitions II“The lower of the costs of non-agreement
(status quo) to constituents, the smaller the ‘win sets’”More self-sufficient states usually have lower
costs of non-agreement than trade dependent states.
If political influence of supporters, opponents relatively equal, political contest may be determined by relatively unaligned groups “in the middle”.
Key factors affecting size of “win-sets”“Level 2” InstitutionsHow transparent?
Secrecy may be advantage – but only if societal ratification of secondary importance to outcomes.
Consultation may be vital for mobilization of / validation of outcomes by key stakeholder groups.
Key factors affecting size of “win-sets”“Level 2” Institutions IIWho has veto points, and at what stages of
process?Centrality of “Fast Track / Trade Promotion
Authority” in securing ratification by U.S. Congress Support still requires support from key Congressional
leaders, often on both sides of House, Senate. Differences between “Treaty”, “Executive Agreement”
Importance of provincial support as “cover” for federal trade negotiations in Canada.
The stronger the autonomy of a (democratic) state, the weaker its international negotiating position.
Key factors affecting size of “win-sets”Level I Negotiators’ StrategiesManagement of domestic expectations, fears
key factor in balancing leverage on negotiating partner(s) with capacity for ratification.
Total gains / losses from negotiations often less important than their distribution among actual and potential coalitions of supporters and opponents.
Negotiations more likely to succeed when negotiators “collude” in managing relative costs and benefits of potential agreement.
Managing “game breakers”,risks of “defection”Uncertainty, inadequate political / technical research
often critical factors in managing negotiations.Negotiators often “bluff” in order to convince
counterparts that their “win-sets” or “kinky” – reflecting limited capacity to sell compromises past specific point.
Involuntary defection – a negotiator or leader is unable to secure ratification of an agreementMay result from informal political processes (being
overruled by political superiors or colleagues) or formal political processes (legislative or electoral defeat).
e.g. Negotiations with U.S. government subject to ratification by Congress with independent powers, multiple veto points empowered by decentralized decision-making system.
Managing “game breakers”,risks of “defection” IIVoluntary defection – the reneging on a bargain
by a “rational egoist” in the absence of enforceable contracts.Less likely when likelihood of repeated negotiations
on different subjects creates incentives for the cultivation of trust among political and bureaucratic actors.
Good faith may be reinforced by potential for political, diplomatic or economic costs.
Summary“Two-level” game theory provides general
model for analysis of international negotiationsBUT – use as predictive model depends on the
number of separate factors, actors involved in negotiations, ratification AND
Capacity of negotiators, policy analysts to identify accurately the key members of stakeholder coalitions, their priorities and conditions for ratification in highly dynamic, uncertain game.