Tuesday, 15 May 2007

Using Simple Game Theory To Eliminate Corruption

Game Theory allows foolproof infrastructures to be created. Game Theory also enables corrupt power people to develop templates that lubricate their proprietary corruptions. This post attempts to address one of the basic foundations that corruption is dependent upon - a pliant structure with suitable loopholes. Although the examples shown below relate to betting markets, the same manipulations may be seen throughout mainstream capitalism - from government legislation to the auctioning of 3G mobile spectrum and from military strategy to the establishment of business contracts and even the entire infrastructure of industry sectors. And don't even get me started on the usage of Game Theory to undermine our alleged democratic process in order to initially obtain and then maintain political power.
The first and most important fact to establish is that most Game Theory is absolutely not rocket science. Similarly to Econometrics in relation to Behavioural Economics, Game Theorists are able to find solutions for simple constructs but form spurious non-robust configurations when attempting to model the more holistic structures that underpin all quality modelling. Game Theorists generally focus on the specific and the black box rather than the Bayesian.
Game Theory has major impacts on the game of football. None of the power structures around us have randomly reached their current form and all decisions undertaken by these power bases are set against a strategic plan entirely based on Game Theory.
* UEFA and FIFA utilise simple Game Theory in the making of the draws for both the qualifying and finals of their respective flagship competitions, Euro and World Cup. For the benefit of the host country, the media, geopolitical and economic reasons, certain structures must be established and certain goals achieved. Some of these templates are merely tinkerings eg host nation must qualify to the latter stages of the competition - for the other three teams in the host nation's group, however, this equals corruption.
* Game Theory, in it's most simple form, was also behind many of the machinations in the English Premiership that we have described over the season. For example, we have frequently highlighted the issue of late changes of referee which is a phenomenon that ONLY occurs in England. The choices of the two officials to be interchanged and the timing of the alteration with regard to the markets and, obviously, the specifics of the match may be optimised to maximise the returns to the individuals who are theorising the structure.
* A psychologically based Game Theory is also employed in the provision of disinformation in the media. Thorough analysis of the output of corrupted media is a necessary input to profitable contrary trading strategies which is a rather neat proof that the initial journalism was suitably game theorised in the first place!
These are just three of scores of similar structures that we could share with you. But I'd rather move on to the other use of Game Theory. As Game Theory may be utilised to develop simple watertight corrupt structures, it may also be used to create the equivalent structures to prevent corruption. Is such positive Game Theory ever utilised? Well... no actually, it's not.
In numerous previous posts we have suggested constructions and templates that simply solve the issue of corruption and non-meritocracy in events and betting markets. Among the many corrupt structures that we have solved using the simplest Game Theory are the following:
* Corrupt referees in the Premiership
* Enhanced detection of the illegal usage of Performance Enhancing Substances (PESs)
* Eurovision Song Contest Prizes and Voting
* The utilisation of technology for decisions in football matches
* The solving of criminal behaviour through the analysis of betting market patterns
* The issue of players gambling
Football Is Fixed desire to not only publicise the corruption but to offer solutions. Even if there may be a reluctance from some individuals to face up to the corruption (not many people have the same privileged informational access as market analysts do and, by proprietary and legal necessity, we are unable to provide fulsome proofs of some of our angles), it surely makes sense to put in place robust structures that undermine ANY potential for corruption in the future. Or, of course, you can just leave things as they are and allow the infestation of corruption within the game to become ever more absolute.
Finally, as the mathematics behind these solutions is bobbins when compared with some of the stuff our Trading Team get up to, why isn't it simply put into practice? Who benefits most by these things not being implemented? Who suffers the most? Which market infrastructures are most affected by the different templates?
Bottom up democratic and meritocratic Game Theory can create a cleaner game. Easily. There will always be corrupted events. Always has been, always will be... But the lack of an anti-corruption momentum in the English game has allowed the criminality to become systemic.