If Nobel laureate John Nash, a renowned proponent of game theory, were to advise Prime Minister Thaksin Shinawatra on how to find a way out of the current political impasse, the noted theorist – and subject of the film “A Beautiful Mind” – might suggest Thaksin dissolve Parliament – and quickly.

That is what Somkiat Tangkitvanich, research director of the Thailand Development Research Institute (TDRI), concluded after listening to a lecture on game theory yesterday by Ariel Rubinstein, a mathematician from Tel Aviv University.

Game theory is a branch of applied mathematics that studies strategic situations in which players choose different actions in an attempt to maximise their returns. One aspect of game theory focuses on situations in which acting out of self-interest hurts everyone involved in the game.

“Based on this theory, the Thai people have already said no to Thaksin’s attempt to justify his tax-free Shin Corp deal by offering Bt1 billion to a charity fund,” said Somkiat.

The Shinawatra family received Bt73 billion tax-free from the sale of its business conglomerate, yet the public largely considers the deal unfair.

Therefore, Thaksin’s best option would be to dissolve Parliament, Somkiat argued.

Game theory, which is widely used in trade and labour union negotiations, received popular attention when Nash became the subject of the book “A Beautiful Mind”, which was turned into an Oscar-winning movie.

Rubinstein has conducted experiments in different countries employing a game with two participants.

The first person receives US$100 and is told to share some of it with the other.

The idea is to see how much the first participant wants to keep for himself and how much he is willing to share with another person he does not know.

Under the rules of the game, the second person will accept the money if he feels the offered sum is fair and refuse if it he deems it unfair.

If, however, he refuses the offer, neither of them gets anything.

Rubinstein said that on average Thais offer $48 to the other person, which is higher than the average sum in the West. In Great Britain, the average sum was $42, while in Canada and Israel it was $44.

“Thais are the most generous,” Rubinstein said to an audience at the University of Thai Chamber of Commerce. The outcome of the game suggests Thais are sensitive to the portion they are offered, he added.

Rubinstein’s lecture drew many economists, including Ammar Siamwalla and Somchai Jitsuchon, both from the TDRI.

Somkiat said Rubinstein’s test could be applied to explain the current political turmoil driven by the public outcry against the tax-free Shin Corp deal.

“People say no to Thaksin’s offer of Bt1 billion for charity,” said Somkiat. Thaksin has offered to give away Bt1 billion from the overall windfall of Bt73 billion.

Yet the public’s rejection of it is testament to the growing anti-Thaksin sentiment.

According to game theory, Thaksin has lost the game, and that is why he would do better to dissolve Parliament.

Somchai said game theory could also explain the success of Thaksin’s populist policies over the past five years, even though what he has been spending was taxpayer money.

So far, Thaksin has been winning because poor people have been willing to accept the handouts.

Ammar pointed out that the theory could also account for the confrontation between Thaksin and his opponents, especially firebrand media mogul Sondhi Limthongkul.

“According to game theory, dissolving Parliament [now] is a better choice for Thaksin because he has a greater chance of coming back,” said Ammar.

Meanwhile, the best option for Sondhi is to persist because the longer the protests last, the more damage will be done to Thaksin’s popularity.

However, “You don’t need a fanciful game to explain the current political situation,” he said.

Wichit Chaitrong

The Nation