Why the government isn't going to shut down again any time soon

You may have read earlier this week that there was a shutdown threat looming.  Aaand... Trump said some Trump-y stuff about wanting a shutdown, because he's Trump.

To the surprise of perhaps some, but not those of us who do game theory, there is real movement as of this morning, and there won't be a shutdown.  Not this time, anyway.

A shutdown is a failure.  Not just a failure of government, but a failure of threats.  They occur for one of two reasons:  either at least one side misreads the other, or at least one side wants a shutdown.

Consider the first.  A shutdown is basically a game of chicken.  Two drivers race towards each other.  Whoever swerves is the chicken.  If neither driver swerves, there is a disaster.  If both drivers swerve, both are chickens but at least they both live.  For any one player, the best outcome is for the other driver to swerve, followed by both drivers swerving, followed by being the chicken, followed by... disaster.

There are two "Nash equilibria" to chicken.  I drive, you swerve, and you drive, I swerve.  Any other combination of strategies, and one player can do better, given the other player's strategy.  If both drivers are swerving, any one driver can improve by driving and not being the chicken.  A shutdown is both drivers not swerving.  That's also not a "Nash equilibrium."

Only drunken, stupid people play chicken.  Mistakes happen.  I might think you are going to swerve when you aren't, keep driving, and we get into a crash.  Politics?  Same way.  Filled with stupid people.  One side can misread the others' intentions, and you get a shutdown.  It can happen.

The other way you can get a shutdown is if one side wants a shutdown.  What if one side doesn't think that the shutdown will be bad for them?  I've got great safety features in a yuuuuuge truck, and you're on a bicycle.  Sorry, I ain't swervin'.  OK, that presumes I'm a sociopath, but you get the point.  There can be asymmetries.  If I don't think that a shutdown will hurt my side, I won't back down.  If you don't get that, add in some conflicting expectations, and we're back to a shutdown.  Shutdowns are still failures.

Anyway, does any of this apply to the current context?  Nope.  Schumer swerved.  He'll swerve again, and everyone knows it.  The Dems took immigration off the table, and that's it.  Then, there's that question of benefiting from a shutdown.  That Trump boast about wanting a shutdown?  That's just rubbing Schumer's face in the fact that Schumer can't win on this.  That's it.

There won't be a shutdown.  The Democrats caved, and now they have to keep caving.  They overplayed their hand, and now they're stuck.

Will there be more shutdowns later?  Well, we'll just see about the 2018 midterms, won't we?

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