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#15 - JRL 7225
June 16, 2003
Game Theory Is Used by Army and Bankers. Not in Russia though

In a fast globalizing world there are more and more conflicts which seem to have no end. Moreover, most modern conflicts are quite bloody or at least they promise to become so soon. Such conflicts may be political or economic just as they may be of international or national significance. However there is one area of science, which still exists in Russia despite a lack of funding over recent years, which could provide a 'time-proof' answer to conflict situations. Professor Leonid Petrosian, Dean of the Applied Mathematics and Control Processes Faculty at the Saint Petersburg State University and President of the Russian branch of the International Society of Dynamic Games (ISDGRus), spoke in an interview about the mathematical simulation of conflict situations.

- 'The Card Players' by Paul Cezanne is featured on the website of ISDGRus. Why?

- We study the theory of conflict - that is the mathematical theory of conflict processes. In other words the Game Theory. The most elementary example of conflict can be observed in gambling halls. A game of cards is the closest example of a real-life conflict.

What is a conflict? A conflict arises when different parties have different interests and neither of the parties is able to achieve its own objectives without the compliance of the other parties involved. Of course this does not necessarily mean that the parties concerned will try to destroy each other - it is just that their objectives do not coincide with each other. A conflict arises when one of the parties concerned is unable to exert complete control over the situation.

- What are the aims of your society?

- The most important aims of the society are to promote interaction between researchers interested in the Game Theory and its application within the Russian Federation. We disseminate information on the current activity of the society and its achievements both domestically and abroad in promoting research in dynamic games and their possible application.

- How is the Game Theory applied?

- Military specialists were the first to recognise the value of this theory. They understood that the Game Theory could be used to simulate military conflicts.

- Whose military made this initial discovery?

- During Soviet times both the US' and the Soviet military made this discovery at about the same time. In 1977 for example, a monograph was published in the Soviet Union entitled Differential games of pursuit. As a result of this work certain departments were set up to watch over the management of special technical facilities.

- Does today's Russian army turn to you for advice?

- The interest is still there but our military can not afford it at the moment. Actually, when the Russian Defense Minister came to the university I asked him about this and he replied that we would definitely be needed at some point in time.

- Apart from the military who else needs your services, who else is interested in mathematical simulations of conflict situations?

- During the 1980s economists showed an interest in the Game Theory and, unsurprisingly, it was at this time that such works as Theoretical simulations of decision-making situations in economic systems appeared. I can give you one definite example of how the game theory was used. In 1971 we were visited by Chairman of the Leningrad City Council Mikhail Filonov. He came to us with a very clear-cut problem. At that time budget funds were regularly provided for the development of the city's agriculture. The money was allocated systematically and the money was shared among the different agricultural sectors equally. However Mr Filonov felt that this was not right as some sectors were actually less developed than others. He asked us to come up with the best formula for how to allocate the budget funds. We managed to do this very quickly.

- This formula did not remain the optimal decision for long.

- All optimal decisions face one serious problem. Optimal decisions in conflict processes are not time-proof. This has been proved by mathematics. Our task, however, is to find the optimal decision which is least subject to the passage of time.

Imagine that several world leaders sit down to sign a long-term agreement on disarmament. If you ask any of the leaders how advantageous the agreement is to his or her country they will reply that it is the best choice from their point of view.

Then, after some time has passed, the same leaders gather together once more to find out how the agreement is being put into effect and what steps to take next. It is exactly five years since they took what seemed like an optimal decision and you feel that everything should be going according to plan. However, it turns out that this is not the case and there is a new conflict. With the help of the Game Theory though it is possible to simulate the situation in such a way that the original decision remains time-proof.

- I am afraid that you were not even consulted for that level of agreement:

- It is true. The government did not consult us. Perhaps they had too many other things to think about or perhaps, forgive me for saying so, there is a certain lack of competence. In the US the Game Theory is always used.

- Where else?

- The Game Theory is most developed in the US, Germany, France and Japan. There are also specialists working in Italy and Spain. Just recently there has been growing interest in China and India. In fact, when we held international conferences in China in 2002 and in Hong Kong in 2003, the events attracted a huge level of interest and it was talked about in all the newspapers. We also held a similar conference in Russia last year but it did not attract the same level of public interest.

- Does that mean that there is no demand in Russia for the work you are doing? On what funds then does the Centre of Game Theory exist?

- I can not say that we have been forgotten. The Russian research foundation and other associations allocate us grants, many of our students and post-graduates receive special grants including grants from rich businessmen.

- That means the business world knows about you and takes an interest?

- In order to consult with us, you must be able to formulate your objectives clearly. This requires a high level of education. In Europe, as far as I am aware, most orders come from the banking sector. In terms of Russian business, income is still sufficiently high for them not to bother thinking about optimal decisions.

- Let's imagine that the government comes to you tomorrow and asks you to make a simulation of government reform. Could you do it? Do you still have the necessary resources and technology?

- Our resources are basically just 'grey matter'. There are enough people available for a large-scale project. The government would have to finance the project and provide a clear formulation of what it is they need from us. Moreover, this formulation must be provided by trained mathematicians and economists.

Interview carried out by Natalya Starichkova, Rosbalt
Translated by Nick Chesters

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