Amateur Game Theory analysis - Elections 2009 (1st Quarter)

I'm a great fan of the very concept of Game Theory - the study how to model strategic situations mathematically - for which our very own Prof Yisrael Aumann won a Nobel Prize in Economics.

I would love to know how Prof Aumann would map out the political landscape on Feb 11 2009, the day after Netanyahu stole defeat from the jaws of victory - but unfortunately I don't have access to him or his phenomenal knowledge and understanding. Even so, I'm going to dabble a bit in analyzing where things stand on the political landscape, and how they will play out.

First up: the facts. As of this writing, the provisional seat allocations are:
Kadima - 28
Likud - 27
Yisrael Beiteinu - 15
Labor - 13
Arabs - 12
Shas - 11
National Union - 4
Gimmel - 4
Bayit Yehudi - 3
Meretz - 3

Now bear in mind that the votes from the army usually favor the Likud or other right-wing parties, and they have the power to swing one or two mandates. Furthermore, Kadima made its vote-sharing agreement with the Green Party, which failed to make the cut, so they won't be getting diddly squat from any vote sharing agreements, making them even less likely to benefit from the army's votes. But in the meantime it's an unknown and I'm going to discount the army votes for now.

So here's my take on the parties, what motivates them, and how negotiations will go, working in rough order of more certain behavior to less certain.

The Arabs: up to 12 seats, will probably lose one or two from the army votes. Bad news for everyone; they won't join any coalition and are effectively just there as spoilers.

Meretz: I shed no tears for them; they lost their support to Kadima, and that's a large part of the reason why Livni pipped Bibi at the post. If only the right-wingers who voted for Lieberman had realized the same thing on the other side of the spectrum... Anyway, Meretz is squarely in the Kadima camp; no way they'll be part of a Likud-led coalition. And if Livni wants Lieberman in her government, she'll have to do without Meretz, too.

National Union: Will never join a Kadima-led coalition, being that they view Kadima as Satan's spawn (as do I). Lo nishkach v'lo nislach.

Bayit Yehudi ("New" Mafdal): Will join any coalition that will have them. The epitome of dati leumi obsequiousness, they will attempt to do kiruv on the most hardened and cynical of politicians, following the tradition of Mafdal remaining in Sharon's government in the vain hope that their feckless presence would somehow prevent the expulsion and destruction of Gush Katif.

UTJ (Gimmel): Same goes for them, except they're less obsequious and more demanding; they will join any government that will meet their price tag.

Shas: They've officially thrown in their lot with Bibi, and Livni has publicly all but burnt her bridges with them. It will take a lot for her to climb down and accept now what she rejected before with such righteous indignation. Shas's price tag is not only waaay higher than UTJ's; it carries with it a strident demand for a socialist economic policy, which even Netanyahu is going to have difficulty finessing. Being that both Likud and Kadima are basically free market supporters, Shas must know that their demands are not going to be met easily, and both Likud and Kadima would frankly rather form a coalition without Shas at all - if they could.
Question: Knowing that his party is suffered rather than welcomed in a coalition, will Eli Yishai tone down his demands and try to get what he can rather than take the chance of being left completely out in the cold?

Labor: Ehud Barak has stated that he's expecting to be in the opposition, but I don't think he'd say no to any opportunity to be part of anyone's coalition. He's more naturally at home with Kadima, but I can easily see him in a Likud coalition, too. Remember, this "socialist" follows the tradition of many other socialist leaders by making sure that his own nest is very well feathered before he attends to the needs of the starving masses. I don't think there's an ideological bone in his body; if he could hang on to a ministry - any ministry - by signing up for a Likud coalition, I don't think Netanyahu's diplomatic or economic agenda would faze him much. He might have more of a problem convincing his fellow MKs to come along for the ride, especially when the knives are already out for him in his own party...

Yisrael Beiteinu: While I may quietly enjoy some of Avigdor Lieberman's demagoguery, the man simply gives me the creeps. There's something darkly Orwellian about him. He says he's right-wing, but he sat quite happily in Ehud Olmert's government while the embers of Gush Katif were still warm. His loyalty to the Jewish people and Eretz Yisrael is not religious; it's racist - and he is open about the fact that he is quite happy to toss away pieces of Israel just so he can get rid of the Arab Israeli citizens who're on it.

Fundamentally, though, Lieberman is a power-seeker, and as head of the 3rd largest party, he knows that he should be in any coalition. He will go to the highest bidder.

Likud: If Netanyahu doesn't manage to block Livni and form his own government, his political career is finished, and he knows it. This electoral loss, when he should have had an easy win, is an enormous embarrassment to him, and he will be desperate to pull this one out of the fire. He also will not play second fiddle to Livni. As far as he's concerned, the right-wing bloc won, and he should be PM. And don't ever forget the deep enmity and resentment between Likud and it's mamzer step-child Kadima. Forget about sitting in any Kadima-led coalition; the Likud MKs will never agree to it. They would rather do another stint in the opposition, knowing that the moment Livni slips up, they can form their own government without going to elections again.

Kadima: Kadima is desperate, too, but for a different reason. If they don't get into government, they will have as much chance of surviving until the next election as a catfish in a terrarium. Kadima was conceived, formed and congealed around only one thing: power. They have no common ideology, just a deep desire to be in charge, and they do not care if Israel is turned into a smoldering pile of ashes, as long as they can stand on top of the pile. This is why they pursue the diplomatic agenda they do - they perceive that this is where the international community and the ruling elites of the media and judiciary want them to go, and as long as they continue sticking it to the settlers and advertising wholesale giveaways of Israel's historical and strategic assets, their grip on power will be strengthened. Kadima is not equipped to be an opposition party, and my prediction is that if they are not at least part of this government, they will be destroyed in the next election by the comeback of the more ideologically motivated Labor and Meretz. Question: if Tzipi Livni knew she could not form her own government, would she play second fiddle to Netanyahu?

Tachlis: here's the scorecard:
Kadima + Meretz = 31 MKs who will only sit in a Kadima coalition.
Likud + NU = 31 MKs who will only sit in a Likud coalition.
YB + Labor + Shas + UTJ + Mafdal = 46 votes for sale, of which 13 are more inclined toward Kadima and 33 more toward Likud.

At this point, Likud seems to be sitting pretty. Bibi says he wants a government of national unity. If Kadima decides to sit this one out, Likud+Labor+YB = 55; add NU and Mafdal, and the charedim can safely be left out in the cold, too. Obviously Bibi would want some insurance, and with less negotiating leverage, Shas and UTJ could be brought in for a much lower price. Even YB would theoretically be disposable in such a coalition, which would then leave the Likud with a narrow 62 MK coalition - and that wouldn't be the first time it's happened. When any party in a coalition is disposable, its relative worth is diminished, and its negotiating leverage is correspondingly undermined.

For her part, Livni has a headache from the fact that YB and Meretz will not sit together in a government. Theoretically she could squeak together 62 MKs from Kadima, Meretz, Labor, Shas, UTJ and Mafdal - but what a mess! Little 3-seated Meretz could bring down her government with the first Charedi demand for yeshiva funding. Meretz will therefore not be in any government, her starting score goes back to 28, and she cannot form a government without Lieberman. Ironically, her weak position could itself be her savior. If Lieberman has done the same math as I have, he will realize this, and know he can ask any price of her, ad chatzi hamalchus. Don't be surprised, therefore, if Lieberman recommends Livni for PM, because he reasons he can get a way better deal out of her than he can with Bibi.

If Lieberman recommends Livni for PM, she will have the votes of the Arabs+Meretz+Labor+YB+Kadima = 71 MKs, and Peres will certainly give her first bite at forming a coalition. Desperate as she is to be in power, she will give Lieberman whatever he wants and form a government of Kadima, YB, Labor, UTJ and Mafdal - 63 MKs. UTJ will be easier to accommodate than Shas, who in any event have bad blood with her.

So now it's Livni who seems to have her nose ahead again! Are we having fun yet? This is just like the Pirate Puzzle; the story goes on!

Now, if Netanyahu is reading this, and realizes that Lieberman could potentially suck the wind out of his sails, he's either going to have to make a better pre-emptive offer to Lieberman (very expensive, knowing how much leverage he already has over Livni), or lock Livni's other potential partners out of her coalition somehow. If he can get either UTJ or Mafdal to bind themselves to him, he can block Livni's coalition. Mafdal is probably the softest target, because they are ideologically closer, and honestly, they don't want Livni to be PM. They would join her government only out of a general misguided desire to influence them for the good, not because they actually want to see yishuvim uprooted or Jerusalem divided C"V. They are also idealists, not power-seekers, so they won't be doing the same game theory analyses that we are currently engaging in. If Netanyahu can just close in on Mafdal and sweet-talk them into declaring publicly that they will have no part in a Livni-led government, then Lieberman would gain nothing by throwing his support behind Livni, and he would only create bad blood with Bibi.

So watch for Mafdal (or maybe UTJ) making any public statements about not joining a Kadima govt. If they do, that's the sign that Bibi has won. If not, watch for Lieberman making a "surprise" endorsement of Livni for PM.