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Here’s a story in poor timing. I’ve spent the last three years writing a dissertation on bargaining over nuclear weapons, often with Iran as substantive motivation and focus. On Saturday night, my best friend from high school was getting married. Also on Saturday night, the United States and Iran announced a preliminary agreement over Iran’s nuclear program. I didn’t even know until the next morning, and I have been playing catch up ever since.

That said, I have encountered a lot of discussion on social media about the deal. Having spent all those years analyzing the credibility of nuclear agreements, I wanted to make five quick comments about the Iranian deal and such deals in general:

1) Bargaining can work.
A common misconception about bargaining over weapons is that any deal is inherently incredible. The theory is as follows. To buy off a proliferator, the rival needs to offer concessions. But those concessions are hard to retract if the proliferator is not compliant. Thus, the proliferator can take the concessions and build weapons anyway. In turn, because offering concessions has no impact on the proliferator’s decision, the rival should not attempt a bargain.

Although I believed this intuition was true when I began my research project on bargaining over proliferation, it turns out this is wrong. Bargaining over nuclear weapons works. The reason is that a proliferator will ultimately receive some amount of concessions. The rival can just offer most of those concessions off the bat. At that point, the proliferator has no incentive to develop nuclear weapons–if it did, it wouldn’t get much more than it is already getting, but it will have to pay the costs. So bargaining can work.

2) Iran is getting an awful deal (so far).
Broadly, rivals can use one of two nonproliferation strategies. First, they can use “carrots” in the form of the concessions mentioned above. Second, they can use “sticks” like sanctions and preventive war.

Although the announced deal is only preliminary, Iran isn’t getting any carrots. The deal essentially places the United States and Iran at the status quo ex ante: the United States is lifting most of its sanctions (with some oil embargoes remaining), while Iran is agreeing to stricter weapons inspections. As the narrative goes, the “stick” has beaten Iran into submission.

If we are basically back where we started, what was the point of the last ten years of proliferation? One ad hoc story is that Iran is worried about preventive war. But why hasn’t Iran been worried about preventive war in the last ten years? Israel has consistently called for invasion, and Iran has persistently called its bluff. Meanwhile, despite Netanyahu’s desperate pleas, Obama has yet to campaign for a military option. If anything, American reluctance to intervene in Syria has signaled general war exhaustion. So preventive war does not seem to be the answer.

The other ad hoc story is that sanctions are crippling Iran’s economy. But this by itself is unsatisfying–policymakers in Iran must have foreseen that the United States would sanction Iran for noncompliance. Yet Tehran marched forward anyway–the regime must have calculated that the costs of nuclear weapons (both from sanctions and the R&D costs) were worth the end product. One way to resolve this is to assume that the United States had private information on the effectiveness of sanctions–Iran grossly underestimated the effectiveness of sanctions, while the U.S. knew they would work to perfection. If you think that sanctions were wildly more effective than anticipated, then you could reasonably expect the announced deal to be credible, and Iran will forgo proliferation so as to avoid more sanctions.

If you are skeptical that this is the case–and I am–then the United States will need to offer carrots to induce Iran’s compliance. In the absence of credible and effective “stick” options, nonproliferation agreements only work when potential proliferators receive good deals. The announced deal could not be much further from that, as Iran is getting nothing more than what it would have received had it not walked down this road at all. Perhaps these carrots will come in the second stages of negotiations. For now, however, if you think that the sanctions were not sufficiently effective, then this deal will not work until the United States gets out its checkbook.

3) Carrots must be permanent carrots.
If carrots are a part of some eventual grand bargain, they won’t come cheap. Washington won’t just be able to write Iran a one-time check for $10 billion in aid and expect the problem to go away. Rather, the U.S. will have to keep offering Iran that amount of aid year in and year out. In contrast, if concessions are a one-time gift, Iran has no incentive to maintain the deal going forward. That doesn’t mean that the United States shouldn’t pursue a deal. After all, deals are credible when structured correctly. Just don’t expect a comprehensive agreement to be on the cheap.

Along these same lines, the United States needs to make sure it will credibly give those carrots year in and year out. If Iran expects that a deal will suddenly stop at America’s whimsy–perhaps because of a new, hardline president–the deal will fail.

4) Inspections aren’t pointless.
Hardliners seem to have a mantra that inspections are useless since they can never be all-encompassing. They miss the point. Inspections aren’t always designed to create perfect information. Rather, inspections make it costlier to proliferate, since inspectors force proliferators to develop nuclear weapons via more inefficient means. Greater proliferation costs open up bargaining ranges, reducing the probability of preventive war or further investment in nuclear weapons.

Note, however, that inspections are only an intermediary step. Inspections don’t convince states to completely stop proliferation activities–that is what the carrots are for. Put bluntly, inspections without carrots won’t do much good.

5) War bargaining =/= arms bargaining.
From an IR theorist’s standpoint, it is tempting to use the bargaining model of war as a framework for nuclear negotiations. Yes, there are a number of similarities–bargaining, shadow of war, information issues, commitment problems. But nuclear weapons are not a bargaining object in themselves. No one in Tehran will look at the first Iranian nuclear weapon and think “SHINY!” Rather, nuclear weapons are an inefficient means to an end. Fearon 1995 is a good tool to start with, but we need a larger toolbox to really understand the dynamics of bargaining over proliferation.

Yes, that was a shameless plug for my dissertation.

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The bottom line here is that negotiations aren’t nearly over. The United States will likely have to make real concessions to Iran to induce Tehran to permanently end its program. Anything short of that will lead to more sanctions, preventive war, or nuclear proliferation.

I will be presenting a paper at the annual Peace Science Society meeting this weekend. The paper it is based on is from my dissertation. Here’s the abstract:

Why are some arms treaties broken while others remain stable over the long term? This paper argues that the changing credibility of launching preventive war is an important determinant of arms treaty stability. If preventive war is never an option, states can reach settlements that both prefer to costly arms construction. However, if preventive war is incredible today but will be credible in the future, a commitment problem results: the state considering investment must build the arms or it will not receive concessions later on. Thus, arms treaties fail under these conditions. The paper then applies the theoretical findings to the Soviet Union’s decision to build nuclear weapons in 1949 and Iran’s ongoing nuclear program today. In both instances, war exhaustion made preventive war incredible for the United States, but lingering concerns about future preventive war caused both states to pursue proliferation.

The presentation itself will cover the baseline bargaining-over-bombs model and use the war exhaustion extension to explain Soviet proliferation. If you can’t make the actual presentation (Friday, 10 am, Sequoya 3), check out a copy of the paper, look over the slides, or watch a video version of the presentation below. Comments are welcome!

Edit: I have since included a more detailed version of this post in my book Game Theory 101: Bargaining.

In the 24 hours since Congress reached a deal to reopen the United States Government, many reactions have been along the lines of “this shutdown was pointless–the deal they reached could have also been reached 16 days ago.” And while it is true that an identical deal could have been made 16 days ago and everyone would been better off, I think it is a huge leap to say that the shutdown was pointless. Rather, the shutdown conveyed information to moderate Republicans that they could not have received without the shutdown. This new information information made the deal palatable yesterday even though it was unpalatable two weeks ago.

I go into further detail in the video below, but here is the simple version. Neither Democrats nor moderate Republicans preferred a shutdown to some deal that kept the government going. However, based on the PR blitzes both parties went on during the shutdown, it seems reasonable that there were conflicting viewpoints on how the public would react. Republicans thought Democrats would shoulder most of the blame; Democrats thought Republicans would shoulder most of the blame. Consequently, both stood firm.

Sixteen days later, it became clear that the public was blaming the Republicans. Polling on this had been consistent for a solid two-week period. It would have been incredibly difficult for Republicans to stage a comeback at that point. And waiting any further risked a default, which would have been even more costly. So the Republicans agreed to the deal. The shutdown made this possible–the costly delay taught the Republicans that a shutdown was a losing battle, which in turn made them more amenable to a deal. From a welfare perspective, this sucks. But that is also the nature of bargaining under uncertainty.

Perhaps an analogy to war is useful. War is stupid–you could always take the result of the war, implement it without fighting, and leave everyone better off. But sometimes a weak party believes it is stronger than it really is. This makes it overly optimistic in bargaining, leading to a breakdown and war. However, the process of fighting reveals the weakness, in turn making the weak side willing to sit down at the bargaining table. The Republicans are the weak side. The Democrats are the strong side. The costs of war are the costs of the shutdown.

Overall, it is easy to blame the shutdown on partisan politics. And while extreme polarization makes the costs of bargaining breakdown appear smaller, partisanship alone gives a poor explanation for the shutdown. There needs to be some sort of bargaining friction, and I think uncertainty over who will receive the blame makes a convincing story.

I will be giving a presentation at the Peter D. Watson Seminar Series next week on why weapons inspections are useful. Here’s the abstract:

Abstract: How do weapons inspections alter international bargaining environments? While conventional wisdom focuses on informational aspects, this paper focuses on inspections’ impact on the cost of a potential program–weapons inspectors shut down the most efficient avenues to development, forcing rising states to pursue more costly means to develop arms. To demonstrate the corresponding positive effects, this paper develops a model of negotiating over hidden weapons programs in the shadow of preventive war. If the cost of arms is large, efficient agreements are credible even if declining states cannot observe violations. However, if the cost is small, a commitment problem leads to positive probability of preventive war and costly weapons investment. Equilibrium welfare under this second outcome is mutually inferior to the equilibrium welfare of the first outcome. Consequently, both rising states and declining states benefit from weapons inspections even if those inspections cannot reveal all private information.

Download the paper here.
Download the slides here.

So Syria’s chemical weapons have made life a little more interesting lately. I know enough to know that I don’t know enough to say whether we should intervene in Syria. I do know something about Iran, though. Here, I’m briefly going to argue that not intervening (or a very limited intervention) in Syria could help our ongoing negotiations with Iran regarding its nuclear program.

Before going further, I want to emphasize that this departs from the conventional wisdom. The standard argument is that failure to intervene in Syria shows weakness–if we aren’t resolved enough to attack Syria, we are less likely to attack Iran, so we should attack Syria to maintain the plausibility of the bluff.

The problem with this argument is that it overlooks the scope of these missions. We could plausibly commit to an air campaign in Syria a la Libya from a few years ago. Iran’s nuclear program, however, is complicated enough that air strikes might do more harm than good. And if you look at public opinion polls on Syria, a majority(ish) supports strikes. Due to Iraq’s shadow, the support for a ground war is in the single digits. Thus, the overall American war narrative here is that air strikes are okay but ground wars are not.

Back to Iran. One reason we cannot reach an agreement with Iran is our inability to credibly commit to a bargain. Given our negotiation history, Iran is worried that if we ever find ourselves in a position of strength again (like right after the fall of Baghdad but before the start of the insurgency), we will immediately cut all concessions to Tehran. Consequently, Iran views nuclear weapons as a costly insurance policy–a wasteful but necessary evil. Yet, if we could simply keep our commitment to not intervene credible, Iran would have no need to proliferate, and we would all be better off.

So if we state a full-scale assault on Syria, we officially signal that the lessons from Iraq are irrelevant, and we as Americans just don’t mind seeking total victory against weaker states. If we don’t do anything to Syria, or just limit the intervention to light aerial bombardments, we signal that Iraq ushered in a new era in which we just don’t do that type of thing anymore. In the former case, Iran will scramble to finish a nuclear bomb as quickly as possible. In the latter case, we reassure Tehran that our commitments to nonproliferation inducements are credible.

The whole thing is a strategic mess. But if you want to learn more about credible commitment in nonproliferation agreements (and incidentally preview my upcoming Peace Science presentation), check out this chapter from my dissertation.

Want to learn about negotiating over nuclear weapons? Come to the Stevens Meeting Center Salon D at 2 pm on Friday.

Download the paper here.

Abstract
This paper develops a model of negotiating over costly weapons programs. Surprisingly, in equilibrium, rising states rarely invest in arms. First, if the extent of the power shift is large, the declining state leverages the threat of preventive war to induce the rising state not to build. Second, if the power shift is too small to be worth the investment, the declining state offers no concessions and still induces non-armament. In between, if the cost are sizable, the declining state offers concessions-for-weapons, or butter-for-bombs deals. Even though the rising state could take those concessions and build anyway, it nevertheless accepts the payments and maintains the status quo. Armament only occurs in the least important of cases–that is, when the power shift is minimal and not costly. The results indicate that major power shifts–such as those caused by nuclear proliferation–are not non-negotiable and are instead the result of other bargaining problems.

According to a new study by Menusch Khadjavi and Andreas Lange, prisoners cooperate more frequently in prisoner’s dilemmas than college students. Here’s the abstract from their article “Prisoners and Their Dilemma”:

We report insights into the behavior of prisoners in dilemma situations that so famously carry their name. We compare female inmates and students in a simultaneous and a sequential Prisoner’s Dilemma. In the simultaneous Prisoner’s Dilemma, the cooperation rate among inmates exceeds the rate of cooperating students. Relative to the simultaneous dilemma, cooperation among first-movers in the sequential Prisoner’s Dilemma increases for students, but not for inmates. Students and inmates behave identically as second movers. Hence, we find a similar and significant fraction of inmates and students to hold social preferences.

I have always thought that the prisoner’s dilemma was a terrible example of strict dominance for introductory classes in game theory. Students tend to shoot back with “snitches get stitches” or something similar, so prisoners would cooperate in such a situation. This leads to an awkward conversation about expected utilities when all you really want to do is explain the logic of strict dominance. The study further suggests we drop the prisoner story from the prisoner’s dilemma.[1]

Nevertheless, after having read the article, I have serious problems with the results. The article is extremely short on theoretical mechanisms, so I am going to step in and provide some speculation. Here are three explanations for the result:

1. The mechanism the authors would prefer is that prisoners are incredibly strategic. To quote Red from Shawshank Redemption, prison time is slow time. Prisoners have nothing better to do than plot, strategize, and scheme against one another.[2] While this might initially appear detrimental to cooperation, the truth is just the opposite. Everyone knows you can’t get away with doing stupid things, so people don’t bother. As such, prisoners cooperate–even though the game is anonymous, cooperation is less likely to lead to a witch hunt later and less likely to cause problems greater than a few Euros worth of phone credit.
2. Prisoners didn’t believe that the game really is anonymous. The experimenters stressed to participants that they would be the only one to see the results. However, this is utterly ridiculous. No one, NO ONE, NO ONE took that statement at face value. Marek Kaminski, a political scientist at UC Irvine, spent some time in a Polish prison for publishing anti-communist materials way back in the day. He wrote Games Prisoners Play based off of his experiences.[3] It is a compelling read. Kaminski might be the only serious social scientist to spend time in a prison. He makes a big point that we really shouldn’t trust any studies of prisoners simply because prisoners do not trust supposedly confidential experimenters. At all. Prisoners might have cooperated in the study because they believed the prison staff would see the results, or other prisoners would see the results, or whatever. College students, meanwhile, know the results will be confidential and are therefore free to defect all they wish.
3. The results have nothing to do with the prison/free dichotomy but rather education levels. Non-prisoners in the study were all college educated. The prisoners averaged below 10 years of schooling. The authors only obtain statistically significant results without any controls. Once they popped in education level, the only thing that was statistically significant was coffee consumption. (Good luck explaining that result theoretically!) But education and the prisoner dummy are about as multicollinear as multicollinearity gets. We probably shouldn’t trust the coefficients on either of those variables. But this also would mean that education would be statistically significant if you ran a regression without any controls. Perhaps the prisoners just don’t see that defection strictly dominates cooperation. The data tell us nothing here.[4]

On the surface, the paper is neat. However, authors of any quantitative model need to think hard about their data generating process and then construct their research design model accordingly. The authors don’t do that here, especially when it comes to point 3. As such, this study is…lacking.

[1]But this is a coordination problem, and we are well past that tipping point.
[2]This is why Orange Is the New Black is an interesting series.
[3]The authors do not cite Kaminski. It should be required reading (and a required citation) for all studies of prisoners.
[4]I would imagine someone has previously studied the effect of education level on prisoner’s dilemma cooperation, but I am unaware of any such study and the authors do not cite any.

A couple of days ago, I wondered what percentage of my life I listen to music. Fortunately, I figured out exactly how to calculate it. I have been using iTunes since I got my first iPod for my 18th birthday in 2005. Three computers and four iPods later, I have managed to preserve my playcounts for the last eight years. A little bit of Excel handiwork revealed that I have spent about 450 days listening to that music, or about an eighth of all my time. That’s about a quarter of all my waking hours!

Want to calculate your time? Here is the process in ten steps. If you have even the slightest experience with formulas in Excel, this will be painless:

1) Open your iTunes and go to your songs tab. Make sure iTunes is showing a column for Time and Plays. (If it isn’t, you can fix this by right clicking on the columns and checking the appropriate categories.)

2) Press CTRL+A to highlight all the songs and then press CTRL+C to copy them.

3) Open Excel and press CTRL+V to paste all the information. Surprisingly, the information nicely conforms to the cells.

4) iTunes gives a lot of information superfluous to our purposes. Ignore everything but the column for Time and Plays (columns B and I for me).

5) Create a new column by multiplying the time column by 24.

6) Highlight your new column (column K for me) and use the drop down formatting menu to convert it to a number.

You might be thinking “why on earth are we doing this?” for the last two steps. Good question. This is part is fancy, so bear with me. Excel treats the time column as a time of day rather than a number of minutes and seconds. For example, it thinks cell B1 refers to 5:09 AM, not 5 minutes, 9 seconds. Excel stores this information as a proportion of a 24 hour day. As such, it thinks of 5:09 AM as approximately 0.21458. Multiplying by 24 and converting it to a number gives us the number of minutes each song is.

7) Create a new column by multiplying the previous new column by the Plays column. (For me, this is multiplying column I by column K.) The result is the total number of minutes you have listened to each song.

This in itself is interesting, and you can use Excel to sort the songs by the most time you have spent listening to them. This list can be quite different from your most played songs, as a 5 minute song counts for twice as much as a 2 minute 30 second song.

8) Use the SUM function to sum the column you created in step 7. This is the total number of minutes you have spent listening to iTunes.

9) Divide by 60 to get the number of hours you have spent listening to iTunes.

10) Divide step 9 by 24 to get the number of days you have spent listening to iTunes.

Can anyone top 450 days? Post your times in the comments below…

I was booking plan tickets for an upcoming trip when I discovered this hack. If you book on American Airlines’ website, it gives you the option to hold your tickets at the current price for 24 hours. Always use this option. Wait until the next day, and input your travel itinerary again. Check the price. If it is cheaper, cancel your current hold and book again for the cheaper price. Then repeat this process the next day. If the fare goes up, buy at the previous day’s price.

There is virtually no cost to doing this–the hold option is free, so the only cost is time it takes to reenter a flight itinerary–and has the potential to save you a lot of money. For example, my fare was $641 two days ago. Yesterday, it was $515. Today, it is up to $680. Consequently, I bought my tickets for yesterday’s price and saved $126. Not bad for five minutes’ effort.

(The extreme price fluctuations make no sense to me either, but that is a different discussion.)

Note that this only works if you book through aa.com. Travel aggregation websites like Kayak and Orbitz do not allow holds. Same goes for other airlines as far to my knowledge. However, if you are not committed to flying with American but American is still the cheapest option, you should still hold the tickets for 24 hours. Then, on the next day, you can rerun your search on Kayak or Orbitz and see if any of the other fares beat the one you have on hold. If so, buy from the competitor–but note that you won’t be able to hold the competitor’s price and repeat the process on the next day.

Hmm…