“Strategic direction is more important today. It's about providing a framework for managers to navigate through the fog of complex chokes. No company can avoid this."

– C.K. Prahalad –

PoS Jan 2014 | Brinkmanship in Delhi

Dear friend,

In December 2013 the Aam Aadmi Party surprised everyone in India by winning the second largest number of seats in their maiden election for the State Assembly in Delhi. And then declined to form the government when offered the chance. Therein lies a great story of strategy.

The power trap

Riding on the promise to sweep politics clean, the Aam Aadmi Party (AAP) rode home with 28 seats in the Delhi Assembly. BJP did better with 31 seats.

But neither had the majority to form the government. The Congress, with 8 seats offered to support AAP if they formed the government. But Arvind Kejriwal, AAP’s President, declined.

He announced he would seek a full referendum from the electorate of nearly 2.5 million people. He would ask if they wanted AAP to lead the government.

While the people of Delhi welcomed the idea, the vast majority of the India’s urban intelligentsia disapproved.

They didn’t see through AAP’s brilliant strategy.

One has to invoke the principles of Game Theory to truly appreciate the import of Kejriwal’s game plan. Instead of tackling BJP and Congress, Kejriwal created a new game between AAP and the people of Delhi.

When Game Theory intersected with Politics

He knew Congress would bide time and pull the rug from under AAP’s feet at the first opportunity if they formed the government. The BJP would shed no tears and instead condemn AAP. If he lost a no-confidence motion prompting fresh elections, people would not be sure if the government didn’t collapse because of its own failings. BJP and Congress would gleefully exploit and magnify AAP’s every blemish.

No matter how loudly he lamented, Kejriwal would never be able to drown other voices. That is why he decided to go to the people again and seek a specific mandate to form the government.

Yes and No

In this new game between AAP and the electorate, Kejriwal gave the public two options (or strategies, as we say in Game Theory). Say Yes – go ahead and form the government – or No – don’t. If people said No, it would be clear they intended to return AAP with absolute majority in the fresh election.

If they said Yes, it would mean they wished to see a clean party rule the State. Now, the Congress party as the coalition partner of AAP, would think twice before pulling down the government and becoming the villain in people’s perception.

If they or the Opposition were foolish enough to pull down the Government by trickery, Kejriwal’s version of events would strongly resonate with the electorate. BJP and Congress would have frustrated their dream. In the ensuing elections, people would very likely vote the AAP to power and exact a terrible revenge on the villains.

Kejriwal had unleashed a game of brinkmanship on the unsuspecting and enthusiastic people of Delhi. The upside was in AAP’s favour regardless of whether they said Yes, or No. As in every game of brinkmanship, there was – and still is – the possibility that AAP may lose a fresh election. But Kejriwal figured that was an acceptably low risk.

Shaping the game

By seeking the referendum Kejriwal accurately estimated he could not lose. I don’t know if he had studied Game Theory but he did apply its principles well.

The strategist plays the game by anticipating the moves of others. The brilliant strategist shapes the game for others to play. We too can, in business and everyday life.

V.N. Bhattacharya
Business Strategy Consultant

For more on the subject read ‘Traffic Jam – a game theoretic model of an everyday problem’