Today’s Labour party is divided and angry. 72 hours seldom pass without the MPs or the leadership suggesting the others can’t be trusted. If no one is happy, surely some sort of change must be around the corner? In the short run, the MPs have the power: they could create a crisis for Jeremy Corbyn tomorrow while he can only get rid of them over time. So one of the few remaining interesting questions you can ask in Labour politics is, when will they act?
This is the sort of situation game theory was invented for. By describing different choices available to people in precise terms, the mathematician John Nash, found he could explain suboptimal equilibria, i.e. situations that stay the same even though everyone is unhappy. Take a town that depends on a single road, maintained through voluntary donations. Nash’s theory says the road will fall into disrepair, even though everyone would be better off with a decent road. No one will pay the whole cost of something themselves when the benefits are shared amongst everyone in town. If they donate, others will use the road without donating. So until the rules change, through the creation of a compulsory tax for example, the road gets worse and so does life in the town.
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