Non-cooperative equilibrium is an important aspect of Game Theory. It was articulated by Professor John Nash who went on to win a Nobel Prize in Economics for it. The Oscar-winning movie, A Beautiful Mind, was based on the life of the great mathematician. Non-cooperative equilibrium, or the equilibrium between two rivals, has each player choosing a strategy which it thinks is in its best interests given the strategy of its rival.
India, Pakistan, and the Nash Equilibrium
India and Pakistan are two nuclear-armed countries. Each country understands that if it launches an attack on the other, its counter-strategy would be to respond with a similar attack. Therefore, the strategy that is the best interests of each country is to not attack the other. The result is a Nash (non-cooperative) equilibrium where both countries coexist without going to war with the other.
Uri Attack Shook the Non-Cooperative Equilibrium
The Uri attack shook this carefully calibrated equilibrium. If the Indian army did not respond to this attack, then it would have given Pakistan the impression that the Indian army will not respond to attacks. Pakistan’s calculations about India’s counter-strategy in case of an attack would have been altered to give it more confidence in enacting this kind of adventurism. So thinking, Pakistan might have changed its strategy to something more aggressive. Its new strategy may have been to attack India again. In that case, the Nash equilibrium of peaceful coexistence between the two countries would have been disturbed by Pakistan's new calculation and increased attacks on India.
But there is another aspect too. After the Uri attacks, many Indians called for embarking on a full-scale war with Pakistan. India attacking Pakistan would also have disturbed the existing non-cooperative equilibrium of peaceful coexistence. If India launched an all-out war on Pakistan, Pakistan would have responded in kind. The strategic dilemma before India was how to respond to the Uri attacks in a way that kept the existing Nash equilibrium of peaceful coexistence undisturbed.
India, therefore, chose to launch a surgical strike. In a surgical strike, only a specific target is attacked, leaving the surrounding areas intact. India targeted only the terrorist camps within Pakistan and not the Pakistani Army. The Indian government also made clear that it was not a military strike, but a strike against terrorism. After the strike was complete, Indian commandos returned to their side of the border. With this surgical strike, India conveyed to Pakistan that its strategy of responding to attacks had not changed. So the Nash equilibrium of peaceful coexistence between the two countries is likely to continue into the near future. My bet was that after the Uri surgical strikes, the chances of a full-fledged war between India and Pakistan are highly unlikely. Till now, that bet has turned out to be right.
(The author is an economist based in New Delhi and can be reached @ankurchandra123. This is a personal blog and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)
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