A Billionaire s Political Strategy

A Billionaire’s Political Strategy

Warren Buffett once proposed using dominant and strictly stupid strategies to get both the Republicans and Democrats to support campaign finance reform.^[4] He suggested that some eccentric billionaire (not himself) propose a campaign finance bill. The billionaire promises that if the bill doesn’t get enacted into law, then he will give $1 billion to whichever party did the most to support it. Figure 15 presents this game where each party can either support or not support the bill. Assume that the bill doesn’t pass unless both parties support it. The boxes show the outcome rather than each party’s score.

Figure 15

In the game that Buffett proposed, supporting the bill is a dominant strategy, and not supporting it is strictly stupid. If the other party supports the bill then you have to as well or else they get $1 billion. Similarly, if they don’t support the reform, you should support the bill, and then use your billion dollars to crush them in the next election. Buffet’s plan would likely work, and not even cost the billionaire anything, because both parties would always play their dominant strategy.

^[4]Campaign for America (September 12, 2000).