The winning theory

                                                                                                                Ankur Bora

Washington, D.C., December 1994: In the ballroom of a downtown hotel, a most unusual auction was in progress. For sale was nothing but air – airwaves that could be used for a new generation of cell phones, pagers and other wireless communication devices. Hailed as the greatest auction ever, the event garnered more than 7 billion, dispensing more than 2,500 licenses, thereby breaking all records for the sale of public groups in America. The brain behind this auction was an unlikely group of economic theoreticians and experts in the in the mathematical field of game theory. These economists had been using Nash equilibrium, as it became known, a conceptually simple but powerful mathematical tool to develop a detailed picture of how bidders would behave in different types of auctions and which strategies work best in such a competitive situation – and the equilibrium theory passed with flying colors, spectacularly.

Assam Tribune , Horizon 23rd June 2017

Royal Swedish Academy of Sciences, October, 1994: Carl-Olof Jacobson, the Secretary General was reading the announcement of Economics Nobel Prize to John Forbes Nash, “the greatest moment” – he later said of his twenty year tenure at the academy. The saga of Nash’s Nobel Prize is almost as extraordinary as the lift story of the laureate. Regarded as one of the greatest mathematicians of the 20th century, John Nash was awarded for his seminal work on game theory, or the mathematical study of decision-making. Although , it was his devastating mental illness that has been more familiar to a wider audience thanks to the 2001 Oscar-winning film “A Beautiful Mind” in which he was played by Russell Crowe. In the late 1940s mathematician Nash, then a young graduate student at Princeton, realized that in any finite game there is always a way for players to choose their strategies so that none will wish they had done something else. In his Ph.D. thesis, Nash came up with the notion of a “strategic equilibrium”, a collection of strategies, one for each player, such that if all the players follow these strategies, no individual player has an incentive to switch to a different strategy. Nash's famous equilibrium, perhaps, was the most important idea in economic analysis, though it took several decades to take root. With the Nobel announcement, the Academy have succeeded in its wider acceptance, Today, game theory is applied in a wide range of goods and services, including electric power, timber contracts , online auction services such as eBay and multi-billion-dollar government sales.

University of São Paulo, Brazil, July 2014: An international workshop on game theory and economic applications of the game theory was taking place attended by prominent game theorists and leading economists from around the world including John Nash. Among the participants was a young Assamese Dr. Surajit Borkotokey. Surajit is a Math enthusiast who had the distinction of winning the national award for the Best Research Paper in Mathematical Science at the Indian Science Congress as well as the Indo-US Research Fellowship at Louisiana State University, USA. He is currently a Professor of Mathematics, Dibrugarh University. In the summer of 2014, Surajit was invited to present paper at this workshop. The conferences provided Surajit an excellent opportunity to hear from world-renowned mathematicians – the most memorable was the plenary lecturer by John Nash. “He was by far the most charismatic speaker in the conference”, Surajit was sharing the incredible meeting with the Nobel laureate. “Dr. Nash was warm, easy to approach, and easy to talk to. Our brief conversation covered everything from my work in the Cooperative Game Theory to Assam tea. I am very excited about meeting John Nash in person, moments which I will cherish all my life.”  Over the years, I have been communicating with Surajit who is providing me insight into game theory and how it can be applied to resolve some of the pressing issues of Assam.

Subansiri Lower Hydroelectric Project, Gerukamukh Assam Arunachal border: Despite incurring a staggering 6,600 crore, the hydroelectric project ended up in stalemate. Game theory exponents like Surajit would call it a problem in resource sharing. The opposing party, i.e. Assamese people feels that the other party i.e. mainland India is exploiting the North-East hydel resources for its benefits while it is Assam alone who will suffer ecosystem damage and loss of land. They believe New Delhi, while setting the rules, is not assessing the serious threats to the livelihoods of the hundreds of thousands of Assamese people who depend on small-scale fishing and subsistence agriculture in the downstream areas. As per game theory, it is not a fair game; Assam with the downstream area should have been the dominant player, not the other way around. Surajit conveys his views on the subject – “there should be an alternative set of rules which will take on board the concerns of Assamese people. The people of Assam should be included as players in this game along with the other beneficiaries and given their due share of the resource.”   

Kaziranga National Park: a world heritage site, the park hosts two-thirds of the world's Great One-horned rhinoceros. However, the population of rhinos, of late, is under grave threat because of the poachers on the hunt for the prized rhino horn. Rhino poaching, though, has yet another dimension - the poor socio-economic conditions of the local communities. Many of the poor villagers are lured into working for poachers. “In the present context the poachers have no other better option than poaching.” Surajit feels that there is no solution as long as the problem is treated as law and order alone – “If we provide a better strategy for their livelihood as it is done in some cases where the hunters are assigned with the responsibility of protecting the forest, the equilibrium will shift from stalemate to co-operation and better results would certainly follow.”

Like Surajit Borkotokey , there are a great number of young man and women who are able to draw upon the wealth of basic research into game theory and its applications. John Nash, the founders of game theory would surely have approved. Figuring out the winning strategy, after all, is the name of the game.

                                                                                                ankurbora@hotmail.com