Human Behavioral Models Make Forecasts

Bruce Bueno de Mesquita, an academic at New York University, has made some impressively accurate political forecasts with computer models using game-theory software.

In May 2010 he predicted that Egypt’s president would fall from power within a year. Nine months later Mubarak fled Cairo amid massive street protests.

In February 2008 Bueno de Mesquita predicted that Pakistan’s president Musharraf would leave office by the end of summer. He was gone before September.

His developed a computer model that uses game theory to work out how events will unfold as people and organisations act in what they perceive to be their best interests.

Numerical values are placed on the goals, motivations and influence of “players” such as negotiators, business leaders, political parties and organisations of all stripes, and, in some cases, their officials and supporters.

The computer model then considers the options open to the various players, determines their likely course of action, evaluates their ability to influence others and hence predicts the course of events.

Mubarak’s influence, for example, waned as cuts in American aid threatened his ability to keep cronies in the army and security forces happy. Underemployed citizens then realised that disgruntled officials would be less willing to use violence to put down street protests against the ailing dictator.

Today’s game-theory software is not yet sufficiently advanced to mediate between warring countries. But one day opponents on the brink of war might be tempted to use it to exchange information without having to kill and die for it.

“They could learn how a war would turn out, skip the fighting and strike a deal”, Bueno de Mesquita suggests. He may be over-optimistic but he does have rather an impressive track record when it comes to predicting the future.

Source: The Economist