Game Theory
Shorn of jargon, game theory yields major insights when applied to everyday problems like the above. Take safe driving in Delhi, for example. Elsewhere, it is dangerous to jump a red light. You may be hit by a legitimate traveller who is going with the green. Or pulled over by the police, and asked to make rational explanations. Thats rational expectation.
In Delhi, however, the chap behind you is not rational, and he will be jumping the light. If you stop, he will hit you. That certainty outweighs the mere possibility of being hit by someone going with the green. Assuming, despite the oxymoron, that the legit driver is a rational Delhiite, he will be travelling with care since he knows red-lighters will be jumping. Thus, safe driving demands that you jump all red lights in Delhi. Presto, game theory develops a pure, risk-averse, driving strategy and incidentally proves that Blueliners have the safest driving instincts.
This simple example also introduces the ticklish point of payoffs, which is the lynchpin of minimax theory. A good game theorist looks to maximise his minimum payoff in the above case, he takes the line of least damage. By minimax calculations, Kesri is a leading game theorist, adhering strictly to rational expectations and minimax payoffs.
Chacha made a win-win decision in ousting Gowda. In the case of parliamentary dissolution, eve-ry member of Parliament would receive negative payoffs, where-as the old man would receive a minimum payoff of time gained vis-a-vis several unopened cans of worms. Kesris rational expectation rightly assumed an all-party compromise to save collective kursis.
The actual outcome, that is Gowda being replaced by Gujral as the big cheese, served chac-ha even better. His payoff in both external and internal leverage increased from the minimum. The best case scenario would have the Congress sharing power and Kesri waggling the can-opener. Game theory suggests Kesri should reiterate his winning strategy. He could finetune his timing by astrological study.
Apply game theory to the fiscal deficit (FD). No econometric model suggests bullet-proof ways to knock off the FD. But, game theory makes the general solution obvious, and suggests hope exists of actually freeing India from its public debt burden.
No rational econometric decision will eliminate the FD. Ergo, according to game theory, the government must cease to operate rationally. Thanks to all the eminent game theorists residing under Z-class umbrellas, were getting closer to the solution, arent we? Of course, probability theory suggests a non-zero probability of eliminating the Indian union along with the FD. But, thats a different branch of mathematics.