Elections Take 2: Game Theory analysis

It's election time, take 2. For those who have joined us late, here's a TL;DR of the situation:

Aaaaaaaaaaaahhhhhhhh!

Ok, here's a little more detail:

Israel had elections on 9 April 2019. Even though the "right wing" bloc had comfortably enough seats to form a government, Avigdor Liberman (Yisrael Beitenu) decided that he would not sit in any government with the Haredi parties. His 5 seats were required for a majority, so Likud's Binyamin Netanyahu could not form a coalition without involving parties to his left, and none of those parties were interested. So rather than allowing Benny Gantz of Kachol Lavan (Blue & White) to have a chance at forming a coalition, Netanyahu had the 21st Knesset dissolve itself, and new elections were called for 17 September.

Netanyahu was hoping that the outcome of the next election will make it easier for him to form a coalition. So, how's that working out so far? As it turns out, very well for Liberman, not so well for Netanyahu. As always, Israel is obsessed with polls, of which several get published every week. For the purposes of this discussion, I'll work with the poll showing the most optimistic numbers from Netanyahu's perspective, which I lifted off the Yisrael Hayom website:

Credit: Yisrael Hayom

This Channel 12 poll from 3 August shows Netanyahu with a total of 57 seats, if you exclude Yisrael Beitenu. And as I said, that's the most optimistic one for him. If the polls are accurate, Netanyahu still has no path to a right-wing coalition, unless Liberman suddenly decides that he's willing to climb down from his anti-Haredi tree. And why should he, seeing as his hardline stand seems to have literally doubled his support? No, Liberman has found what he thinks is a winning formula, and he will stick with it.

What about Gantz? Could he form a centre/left coalition? Here the answer is an even clearer No. His problem is the hate map among his prospective partners. It's like this: The Democratic Camp (heir to Meretz) won't sit with the Haredim. Nor will Liberman. And if there's anyone Liberman hates more than the Haredim, it's the Arabs. And even if he could be persuaded to sit with the Arabs, the United Arab List is too stuck in their anti-Zionist rejectionism, and under their current leadership, will not join any Israeli government. Gantz's optimal non-conflicting coalition is B&W, Labour, Shas, and UTJ, for a grand total of 50 seats. It's not happening for him.

So, back to Netanyahu - how else could he form a coalition? Well, logically speaking, if he can't do it with parties to his right, then he'll have to turn to his left. He has two realistic options here: B&W and Labour. Each has its advantages and disadvantages.

B&W is closer to Likud politically than Labour. A Likud/B&W coalition could potentially form a government without involving any smaller parties. If they need to bring in anyone else, Ayelet Shaked would be the obvious choice. Not Liberman, because I suspect Netanyahu would want to punish him for getting us all into the mess in the first place. Plus, he's shown himself to be an unreliable coalition partner in the past.

The biggest problem with B&W is that they will come with a big asking price, most likely a rotation deal for Prime Minister. And Netanyahu most certainly does not want to give up his job. That will be a deal breaker, in my opinion.

Labour, on the other hand, has embarrassingly little bargaining power, and cannot come with huge demands. If they ask too much, they will get nothing. I can easily see a situation where Netanyahu offers Amir Peretz some obscure post like the Welfare Ministry, and maybe something else peripheral like Agriculture for one of his cronies, in order to sit in the government. Peretz has two choices: a nice ministerial salary to see him comfortably into his retirement, or the glorious distinction of being the leader of the smallest faction in the Opposition. Whichever path he chooses, Labour will kick him out as leader before the next election (as appears to be their custom), so he really has nothing to lose. He'll come up with some rationalization about why he's joining a right-wing/Haredi government, and jump on the gravy train, as befits a good socialist. And that is Netanyahu's path to 61.

Now, you might think we're done here. But this is just where the fun begins. It's time to play Rational Pirates! BUWAHAHAHAHAAA!

Arrr! Shiver me timbers!

Of course, I'm referring to the famous Pirate Game, and if you don't know what that is, you should visit the link. I'm casting Netanyahu and Gantz as the Rational Pirates in our story.

Netanyahu knows he has a path to 61, as described above. But it has its problems. He needs five parties, including his own Likud, in his coalition, they all have their agendas pulling in different directions, and any one of the other four could bring down the government at the drop of a hat. Make that five other parties, since Yamina is just a technical bloc, and once they're in the Knesset they can function independently as the New Right and Bayit Yehudi. Running a government that is constantly beholden to the demands of five other coalition partners will not be easy. Wouldn't it be nice if he could just have one big partner--Blue & White--and not have to bother with those pesky little nudnik parties? If necessary, he could just pull in one other small party, maybe New Right, maybe Bayit Yehudi, to make his 61.

But Gantz wants a rotating Prime Minister position! "Well," Netanyahu can tell him, "I don't need you to form a government. I already have my path to 61, with Labour. But I'd prefer to work with you. We're not that far apart on most issues of substance, and together we can make a coalition that is not beholden to the whims of smaller parties, for the greater good of Israel! Rotating premiership is off the table, but you can have the Defense Ministry and even the Foreign Ministry. Of course, if you'd prefer to be the Leader of the Opposition instead for the next four or five years, that's fine...but chaval al hazman..."

Now Gantz has a quandary. He's made a lot of pronouncements about refusing to join a coalition with Netanyahu. But this really is a great opportunity to form the government that Middle Israel desperately wants. Free from the political demands of the Left and Right fringes; unencumbered by the budgetary needs of the Haredim. How will history remember him? As yet another Opposition leader who never made any impact? Or as the hero who put aside his personal differences with his political opponents, for the greater good?

Gantz nods sagely, then extends his hand to Netanyahu. "You've got a deal," he says. And this is how a coalition is formed between Blue & White, and maybe one other small party.

Alternative scenario: Zehut and Otzma Yehudit pass the threshold

All the above assumes that the smaller ring-wing parties, Zehut and Otzma Yehudit, fail to pass the 3.25% voting threshold. But what if they do? They immediately arrive on the scene with 4 seats each. Those 8 seats will come more or less proportionately off the rest of the parties. Let's say everyone else on that poll loses 1 seat, other than the Arab List (just for argument's sake). Now Netanyahu technically has a path to 61 with just right-wing parties: 29 Likud, 11 Yemina, 6 Shas, 7 UTJ, 4 Zehut, 4 Otzma. But it doesn't really change much from our previous scenario, where Labour filled in the gap; in fact, the optics of forming a coalition with the Kahanists are so bad that Netanyahu would arguably prefer to have Labour in the coalition rather than Otzma. Plus, he hates Moshe Feiglin of Zehut. So it's back to the Rational Pirates game, with pretty much the same inputs as before.

So it seems all roads lead to the same outcome: a Likud/Blue & White coalition, with Netanyahu as Prime Minister.

Of course, anything could happen in the next month, and the seat distribution could be wildly different from current polling. We'll take a look at that after 17 September. See you then!

Credit: Jpost

Political predictions

Mr 180 IQ shows his mettle

Please allow me the opportunity to gloat a bit. Today's political bombshell came as a huge surprise to most of the world, but not to me. I regret now that I never wrote it on my blog, but I have witnesses that I've been calling this practically since the results came out of the previous election.  This situation whereby the largest party in the Knesset constitutes less than a quarter thereof, and therefore it will be minority even within its own coalition, is utterly ridiculous.  The big parties know this, and despite their other political differences, they have one confluence of interests, which is the reform of the electoral system such that 3- or 4-seat splinter, sectoral-interest parties are either eliminated or neutered.  I predicted that 6 months to a year before the next elections came due, Netanyahu (with his estimated 180 IQ) should have enough sense and foresight to band together with Labor/Kadima/Yisrael Beiteinu (or whatever configuration thereof would get him a Knesset majority) and in one signal act, they would jointly nail the smaller parties and institute a major electoral reform to benefit the mainstream parties, before dissolving the Knesset and going to elections under the new rules.  When all this talk started about dissolving the Knesset already and going to new elections, I was sorely disappointed.  And then this morning - I was vindicated!  Bibi has been listening to me all along, and this whole spiel about going to elections now was just a clever ruse to catch everyone else off guard.  A brilliant ploy, indeed.

Mofaz - is he really a winner from this?

Now let's look forward.  Today everyone is lauding this as the largest coalition in Israel's history.  Personally, I don't give it a month in this configuration.  The main "official" reason given for Kadima entering the government at this point is to draft a replacement to the Tal Law, which gave automatic exemption from conscription to Charedim, and effectively prevented anyone who didn't go to the army from getting a legal job.  The other, less touted reason is, as I mentioned above, is electoral reform.  Other than that, there is very little in common between the main coalition partners - from security to social policy, Kadima (at least under Livni) was reflexively opposed to anything the Likud said or did.  Even assuming they have no actual principles other than the pursuit of power, and being in government is currently in their interests, they are not going to give an easy rubber stamp to anything Bibi wants, because they need to distinguish themselves before the next scheduled elections, and somehow do something that will reverse their current abysmal showing in the polls.  If they go quietly to the next elections as acquiescent enablers for Bibi, Labor will eat them alive.  They will have to manufacture some "principled" reason to walk out of the coalition before the next election. Which makes Bibi's pre-condition to Mofaz that Kadima will stay in the coalition to the bitter end all the more ingenious.  If Mofaz complies, without achieving anything for the Left, Labor will have him for breakfast.  If Bibi plays his cards right, he will keep Mofaz on a short leash, but not violate any of today's agreements, so if Mofaz decides in 9 months' time to bolt the coalition for some contrived reason, he will look like a whiner who doesn't honor agreements.  Granted that this is still a better scenario for Mofaz than going to elections now, but still his only hope is that in the next year Bibi gives him substantial grounds for quitting the government on principle and looking like a hero.  And Bibi has a 180 IQ.

Now, given that Kadima and Likud's only real shared interests are (a) replacing the Tal Law, and (b) electoral reform, where is that going to leave the smaller parties in the coalition?  Mafdal (Bayit Yehudi) might be game for a new Tal Law, but Shas will squirm and UTJ will vehemently oppose any change to the current situation, whereby Charedim are prevented by social pressure from joining the army, and therefore by law from joining the workforce, which leaves them no alternative but to stay in the Beis Midrash (and incidentally, in near-guaranteed lifelong poverty).  And as for electoral reform, which is totally against their interests, all of them will try to block anything new.  But now, with Kadima in the coalition, Netanyahu can (and probably will) simply throw them out, and railroad the electoral reform without them.

Nachal Charedi soldiers

Once the Tal Law replacement and electoral reform have been legislated, I believe the coalition with Kadima will have served its purpose.  Being that Likud and Kadima are such bitter rivals, the coalition will anyway be unmanageable, and for Netanyahu's next trick, he will dissolve the Knesset then and there, catching everyone else flat-footed.  He will look like a genius, having deftly manipulated Kadima in and out of his government, Mofaz might be able to claim some credit for showing some national responsibility, and the small parties will get the short end of the stick.  The next government, led again by Likud, might even get an outright majority, once the right-wing splinter parties realize their interests will best be served by joining up with the Likud.

All in all, kudos to Netanyahu for bringing about what I think will be a very significant and beneficial shakeup to the Israeloi political landscape.

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.

The Pirate Puzzle

This riddle is an intro to the next post I'm working on... :)

There are 5 pirates on a ship - the captain, 1st mate, navigator, cook and cabin boy, in order of descending rank. These pirates are all motivated by the same things, in order:

1. Self preservation trumps all.
2. Greed. They would do anything to get one extra piece of gold, short of giving up their lives.
3. Bloodlust. They enjoy seeing other people die, and if it doesn't cost them anything, they'd just as soon see their own comrades snuff it.
   

They discover a treasure of 1,000 gold coins, and a discussion ensues about how to divide it up. They agree and swear a blood oath that:

1. The lowest ranked pirate (the cabin boy) will make a proposal of how to split the gold.
2. The pirates will vote on the plan
3. If the plan wins by a clear majority (no ties!) the plan will be implemented.
4. If the plan fails to gain a clear majority, the person who proposed it will walk the plank, and they return to step 1 with the next ranking pirate.

Then a genie pops out of a bottle that they found with the treasure, and gives them all the gift of infinite intelligence for 15 minutes, during which they will be making their proposals and voting. (They don't suddenly become moral or lose any of their other motivators - they just become instant experts in game theory.)

After the proposal and voting - who is still alive, and how much money do they have?

I won't post the solution... just yet... :)

(Hattip - Sruli Shaffren who introduced me to this riddle)