The Complex Political Game of Government Formation: A Nash Non-Cooperative Game Perspective

Abstract

We use the Nash Equilibrium to solve the complex Lebanese political game of forming a government. We solve for a probable and logical outcome given each player’s priority issues relative to each other player’s priority issues. The results indicate that there is a global best response equilibrium between Hizballah/Amal (“H/A”), Other National Parties (“ONP”), and France. The equilibrium requires a cooperative approach between H/A and ONP to find a solution that satisfies both, particularly in respect of control over the Ministry of Finance (“MOF”), which represents an important executive position in the country’s domestic political system. For example, H/A (given its relatively higher utility for this variable) maintains nominal control over MOF while ONP shares in some manner in the nomination. This would ensure stability of the political regime, which could then facilitate at least some economic reforms. Under this scenario, France is the biggest winner in respect of its regional interests as the success or failure of its initiative in Lebanon may have significant consequences on its credibility in the East Mediterranean region. However, this equilibrium is sensitive to national and regional variables. Further analysis of the statistics indicates that France, in this game, is not the primary player, as the USA has the capability to sway the game in its favor. The results further indicate a clear conflict between the regional interests of France and the USA. The USA’s payoff function was not clear related to the other players and their preferential interests. This may be due to the USA’s main interests residing in other national and regional considerations not considered in this game.