How to win the most notorious strategy in game theory.
Brinkmanship involves deliberately pushing a situation towards a dangerous or even mutually destructive outcome. The goal is to convince the opponent that you are willing to go further than they are, forcing them to back down to avoid the worst-case scenario. Its characteristics are risk-taking, bluff and intimidation. The game of ‘chicken’ in the film ‘Rebel Without a Cause’ is brinkmanship on a personal level. There are many, real-life examples.
Prince Harry’s[i] court victory over News Group Newspapers (NGN, Rupert Murdoch) is in the international news this week and reports, like this from AP, have appeared worldwide.
“… with News Group Newspapers offering ‘a full and unequivocal apology to the Duke of Sussex for the serious intrusion by The Sun between 1996 and 2011 into his private life, including incidents of unlawful activities carried out by private investigators working for The Sun.’ [Associated Press]
Court battles over illegal intrusion by Mirror Group, NGN (The Sun) and Associated Newspapers (The Daily Mail) were started twenty years ago. Since then, NGN has resolved over 1’300 claims, without once admitting guilt or giving an apology. Hugh Grant’s story is typical. He admits that he was obliged to settle without admission or apology because the outcome of his case, even after a win, could have landed him with a bill for many millions of pounds of fees. The apology and admission of guilt that Harry has won is a major breakthrough and could reopen many legal cases, and launch part two of a judicial public enquiry[ii]. How did he do it?
NGN’s strategy is never to yield, even by a millimeter. The victims of intrusion could not afford the possible liability for massive legal fees. (Unless the court rules 100% in favour of the plaintiff, they are liable for some legal fees). Knowing the victims would back down eventually, NGN just kept raising the stakes until they settled out of court, without an admission of guilt or an apology from NGN.
Why was Harry different; how did he win this game of Chicken? He would have received damages, but legal fees could have wiped those out, perhaps even leaving him worse off than when he started. But Harry didn’t care about that. He cared more, much more, about something else. Moreover, he convinced NGN how determined, headstrong, and even reckless he was. Everyone knew where this came from: the death of his mother Princess Diana whilst being hounded by paparazzi in a Paris underpass. For Harry, this was not about rational self-interest. It was deeply, deeply personal. NGN eventually saw how flawed its Chicken strategy was.
Monsanto’s litigation-strategy was well known to anyone in the chemicals business. It was notorious for its apparently senseless raising of the stakes in every legal action it was involved in. It never settled, ever. Occasionally and inevitably Monsanto lost. When that happened, it had to pay far, far more than it could have settled for at any earlier time. It looked illogical, irrational and stupid. It wasn’t: it was a calculated performance. Monsanto wanted to show potential opponents what to expect if they took them on. As Voltaire said, “Pour l’encouragement des autres”.
The late Ayrton Senna (1960-1994) is often called the greatest racing driver ever. Being good at brinkmanship may have helped. He wore a very bright yellow helmet and any driver who saw it in his rear-view on the inside of a corner was likely to take the wider line and let him though. Why? Early in his career, Senna had a practice of taking the inside line late, and never yielding. Nobody can say for sure but most F1 commentators believe Senna’s crashes were an investment in his later career.
To win at brinkmanship, invest in your reputation for never backing down. Company managers make a serious mistake when they assume that their company’s image will intimidate opponents in a negotiation or litigation. Often, it is the precise opposite. Good players of brinkmanship know that most corporations are gun-shy. Not only do they want to avoid distractions from their core business, but they are very unlikely to invest in activities that make them look like playground bullies.
[i] The Duke of Sussex, born 1984, fifth in line to the British throne.
[ii] A report in November 2012 was to be Part One of the Leveson Enquiry. The second part was shelved however when the newspapers being investigated convinced the Enquiry that the illegal activities were a one-off by rogue-reporters; and that they were unknown to the management and executives.