Although Ashutosh Tiwari's attempt in his Strictly Business column to apply game theory to the political gridlock between the King, the Maoists and the political parties ('Crazy as a strategy', #276) is an admirable step in beginning a more rigorous discussion of the political crisis in Nepal, his analysis is inadequate on two counts. First, he recommends that the parties play irrational strategies to make future threats credible but he fails to recognise that the political parties together do not form a single collective institution that is opaque in the way the Maoists and palace are. Their agenda is developed in a discursive manner (as the open publication of Tiwari's own article suggests). So their strategy to play some irrational strategies for the sake of making other threats credible would be common knowledge both to the Maoists and the monarch, whose responses would take that knowledge into account, resulting in suboptimal outcomes for the political parties. Therefore, without a more robust mechanism for making threats it is unlikely that Tiwari's recommendations will be useful. (They may even be counter-productive.)

Second, Tiwari accuses the parties of 'never pose[ing] a credible threat to the palace and the Maoists' but it is not clear that they were ever in a position to do so. He suggests replacing 'old politicians with stridently republican ones', but does not offer a mechanism by which to do this. Since intra-party games determine which individuals emerge as the leaders, what is required first is a more in-depth analysis of leadership evolution within parties. Further, it is unlikely that 'call[ing] the palace's bluff' and 'tak[ing] part in internationally supervised elections', is even a feasible strategy. I am not convinced that foreign countries or organizations would be willing and able to supervise elections in Nepal (and recognise their outcomes) without the palace's consent.

Tiwari is right, however, that for the parties to actually succeed they need to be more creative. The application of a well-known result in bargaining theory-that the bargaining outcome depends on the disagreement payoffs (ie: what each party gets if negotiations break down)-tells us that because the parties do not receive much in a stalemate or breakdown of talks, they do not have many bargaining chips to work with. Given these shortcomings, it is my conjecture that a more sound game theoretic analysis that seeks to maximise party payoffs would construe well-defined mechanisms for cooperation between the parties and the Maoists, or unity between the parties and the palace. I am inclined to believe that unity between the parties and the palace would yield better payoffs for the country and for the palace, as opposed to the development of the parties-Maoist alliance that we are witnessing now.

Avidit Acharya,
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