Playing Poker with Iran

“I’m not bluffing”, President Obama declares publicly to the world to convince Iran to open their nuclear facilities to inspection, forgo the pursuit of nuclear weapons, or “face the consequences.”

Now this declaration might strike us at first as bluster.   Wouldn’t a bluffer always say he wasn’t bluffing?   A compulsive bluffer who never has what he claims would lie every time he claims “this is not a bluff”.   A bluffer who sometimes bluffs, but sometimes has what his raise suggests, by declaring  “This is not a bluff” challenges his opponent to figure out whether his declaration is true or false.  Would declaring it not a bluff make it more or less likely that the threat was a bluff?  Well that depends on the purpose of a bluff.  Many of us may think the purpose of a bluff is to win with a losing hand.  But I came to understand from two very different sources that’s not how it works.

In college I’d sit behind my friend Ritchie at all night poker games.  At the end of the night when the game was breaking up, each person would declare how he did.  Everyone would tend to exaggerate slightly on the up side.  Those who lost a little would declare themselves “even” for the night.  Those who broke even would say they “won a little”, etc.  That left Ritchie who made it a point to speak last as  the perennial  big loser, to make the ledger balance.

The other players bought this.  After all Ritchie had lost so many hands each night.  And he could ill afford it, coming as he did from a blue collar family.  The others assumed he must be dealing drugs or something illegal to afford playing in these high stakes games and losing like this week after week.  Only at the end of the night — actually early morning — we’d go to a favorite Chinese restaurant where Ritchie would disgorge hundreds of dollars from his pockets.  The “big loser” was in fact the big winner.

How had he done this week after week?  I soon learned the truth from Ritchie about bluffing.  The same truth I learned from Jon Von Neumann’s classic treatise on game theory:  The purpose of a bluff is not to win with a losing hand.  The purpose of bluffing is, rather, to win big with a winning hand.

Yes, each night Ritchie lost many more hands than he won.  He called so many others, and then revealed that he himself had nothing.  He would “sheepishly” reveal he had been bluffing.  But those rare times when Ritche had the best hand and knew it became the 3 or 4 biggest hands of the night in this pot-limit game.  Other players who had a good hand or better yet for Ritchie would escalate the stakes, convinced Ritchie was once again bluffing as he had so many times before.  So, at the end of the night, though he may have lost 25 hands he’d stayed in to the end, he’d have won most of the biggest ones.

The purpose of a bluff is not to win with a losing hand; the purpose of a bluff is to win big with a winning hand.

Which takes us back to Iran and the West apparently moving toward a military showdown, while Obama assures them he is not bluffing.  By insisting he’s not bluffing, Obama threatens Iran with the use of vastly superior power,  a bombing campaign or some form of military intervention to prevent it from becoming a nuclear power.  Now a successful threat, as Thomas Schelling pointed out in the Strategy of Conflict, never needs to be carried out.  It prevents the very behavior that would trigger it.

We don’t want Iran to possess nuclear weapons, and if, as, and when, they do, we don’t want to go to war to take them out.  But by credibly threatening war, President Obama may prevent the very thing threatened.  George Washington understood that when he declared that preparing for war often becomes the best and only way to ensure peace.   (He also declared “the surest way to make a man your enemy is to let him know you esteem him as such.”)   Anyway, a threat once revealed as empty, increases the chances that the opponent will take the next threat less seriously.  Until we reach a point where we threaten for real, but nobody believes we’ll carry it out – then we both lose big.

So Obama’s “I’m not bluffing” only makes sense if he establishes the reputation of never bluffing.  It must be a statement of emphasis:  ‘As you must know, I’m not bluffing – because I don’t.’  Otherwise, “I’m not bluffing”   suggests you are bluffing.  Here, then if it is a bluff, the purpose of this empty threat is to suggest he’s not bluffing when he really is.

We loyal Americans, whether we’re fans of Obama or not, have to hope that the President understands how to play the poker game that is diplomacy and international relations.  When the President threatens the use of military power against a well-armed and fanatical enemy, he must be committed to using it – if necessary – on every occasion he threatens.

Especially this one.