Arms Races

There’s nothing that isn’t obvious here. I’m just so mad I have to post something.

First the Americans  say that uranium enrichment is a valid part of a civilian nuclear program, but only for countries it likes.

If you were Iran, how would you respond to nuclear proliferation among American allies?

Now we hear about a huge arms deal with Saudi Arabia (BBC) :

The United States is reported to be preparing a major arms deal with Saudi Arabia worth $20bn (£9.8bn) over the next decade.

It is said to be part of a strategy for countering Iran’s growing strength.

If you were Iran, how would you respond to additional American arms in the middle east?

Of course, the Americans realise that someone in the region is likely to be pissed off when large amounts of arms start rolling off the ships in Saudi Arabia. But they have a plan to deal with that:

To counter objections from Israel, they said, the Jewish state would be offered significantly increased military aid.

If you were Iran, how would you respond to increased American military aid to Israel?

Of course, the Americans realise that other Arab states in the region are likely to be pissed off because the Saudis are being treated as a favourite. But they have a plan to deal with that too:

Other US allies in the region – Bahrain, Kuwait, Oman,
Qatar and the United Arab Emirates – could receive equipment and
weaponry as part of the deal, the officials said.

If you were designing a policy to encourage Iran to build nuclear weapons and expand its military capabilities, is there anything that you would do differently? I can’t think of anything.

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  1. Why don’t you apply your expertise in game theory to your question (recognizing that the leadership in Iran appears to be irrational)?
    That said, back several weeks ago I said:
    ‘I haven’t read your book, but according to Alex [Tabarrok] you have fallen for the ‘QWERTY is inferior’ hoax perpetrated by Lt. Cdr. Dvorak (first) on the US Navy and accelerated by Paul David and Brian Arthur.
    ‘Here’s the actual story:
    ‘Posted by: Patrick R. Sullivan | May 18, 2007 at 06:23 PM’
    To which you replied:
    ‘Patrick – I think I avoid the hoax. My mention of the QWERTY story (3 paragraphs) does not mention Dvorak and is not about the efficiency of QWERTY – I am happy at my keyboard – as about the market power that comes with natural oligopolies. Having said that, I’ve seen your comments elsewhere on the internets and I doubt I would convince you :-).
    ‘Posted by: tom s. | May 18, 2007 at 10:46 PM’
    Now that I have your book in my hands I see that your response is not accurate. You specifically did reference Paul David’s (now thoroughly discredited) 1985 paper, and you drew David’s lesson:
    ‘The QWERTY layout is not necessarily efficient…
    ‘…just as we all use the QWERTY keyboard because it is standard (and so help to make it more standard), so other cases in which it makes sense to join the herd lead to a single well-entrenched but not necessarily predictable–and not necessarily optimal–outcome. Markets do not lead us inexorably to the best solution; instead, the particular equilibrium that markets select may depend on the quirks and accidents of history.’
    Also, on the very next page you repeat another discredited story:
    ‘An archetypal story in network economics was the triumph of the VHS videocassette format over its competitor, the Beta, which was regarded by many as technically superior. The VHS triumphed because it got a head start in the number of movies available in the format. …. The triumph of VHS was driven by herd dynamics, not by the laws of the ideal competitive market.’
    Beta actually had a two year head start over VHS, and that was overcome by the superiority of VHS–you could tape an entire football game with VHS which you couldn’t do with the more compact Beta tapes. It wasn’t ‘herd dynamics’ at all. It was exactly what you claim it wasn’t; a product that better fit peoples’ needs winning out in the marketplace.

  2. I was going to leave a post about the US arms build-up in the middle east, but now I’ve been distracted by the old Beta-VHS debate.
    Actually, I think Beta-VHS is more like the Microsoft-Apple competition (which Apple lost in the first round because they didn’t let other people design software for them): VHS was a more open technology, which resulted in someone providing the option of slower tape speed so you could get more on one tape.
    My memory is that Beta was regarded as the superior technology. A roommate of mine in the 80s did a lot of research and decided Beta was far better, so bought one… and then we discovered that the video stores only stocked a few films in Beta. He threw it out and bought a VHS.

  3. Patrick – first, thanks for buying the book. I appreciate it.
    Maybe there is a bit more grey than I’d like, but I think I basically stick by my earlier response to you. Here is why:
    I do reference the Paul David paper because that’s the paper bringing the story of QWERTY to prominence, so I think it’s the right thing to do. Referencing doesn’t mean agreeing with everything though – Liebowitz and Margolis also reference David, after all. And I don’t mention Dvorak.
    When I wrote “The QWERTY layout is not necessarily efficient” I wasn’t using weasel words. I really meant the “necessarily” because it’s not really the efficiency thing that I wanted to focus on, but the presence of a single standard rather than a presence of many competing keyboard layouts in the current market.
    Liebowitz and Margolis are arguing against the position that Dvorak is “demonstrably superior” to QWERTY, or “vastly superior”. And they do a pretty good job, which is precisely why I wouldn’t argue that QWERTY is “vastly inefficient” or something like that. I had read the L&M paper and found much of it convincing. Interestingly, they conclude that Dvorak has “little or no advantage” (it seems that the majority of the ergonomic studies showed a minor advantage) which fits closely with my “QWERTY is not necessarily optimal”.
    So if I’m not saying ‘QWERTY is (definitely) inferior to Dvorak’, what’s the point? Simply that the typewriter keyboard is a place where a single standard was bound to evolve rather than a collection of alternatives -a point L&M implicitly acknowledge but then ignore. The presence of a privately-owned single standard (ie close to 100% of the market), which is an effective short-term monopoly, implies short-term market power. And unless you are arguing that QWERTY is demonstrably superior to all other layouts (which I don’t think you are) then I would think you would agree that QWERTY has basically 100% presence today *because* it is a standard, not because it is about as good as Dvorak.
    It’s the same with my (single paragraph) mention of VHS vs Beta. I do say there that Beta was “regarded by many as technically superior” which is surely true (Yappa for one). I never used one myself. But again, the point I was trying to make was that it was always going to be one of VHS or Beta, just as it is likely to be one of Blue-Ray or that other high-density DVD format whose name I forget. These are winner-take-all markets.

  4. Blue-Ray or that other high-density DVD format whose name I forget
    I’m reading The Book at the moment, & immediately after reading this comment I went to your additional-material page on chapter 2.
    Hint, hint.

  5. Sorry Tom, your explanation doesn’t work. If you merely wanted to show the usefulness of having a standard you could have simply done it by pointing to the typewriter keyboard. There was no reason to reference Paul David’s paper at all. There’s only one point (you obviously thought) he supported; that markets produce the ‘wrong’ result in some circumstances.
    And, you reinforced the idea by immediately following with the false Beta-VHS example.
    In a book that is devoted to debunking ‘MarketThink’, I see only one reason for your using those two examples.

  6. Phil – right: HD DVD – thanks.
    It looks as if Blu-Ray (without the e apparently) is winning the war in recent weeks. Consumers have cast very few votes yet, but Blu-Ray has got Target on side to sell players after getting BlockBuster Video to sell Blu-Ray movies exclusively in most of its stores.
    But, Patrick, I’m sure that’s just reflecting our latent preferences :).
    I think we’ll just have to agree to differ on the meaning of what I wrote. You seem intent on reading motives and opinions into what I insist is simply the correct practice of referencing appropriate papers. Yes, I do think that markets produce bad results in some circumstances. Perhaps you think they never do? Personally I think that’s Panglossian.

  7. Tom, I’m evaluating the logic of your argument. And, it clearly doesn’t parse. The theory of the David paper is that we got ‘locked-in’ to an inferior standard, thanks to market forces.
    You write a book debunking what you call ‘MarketThink’, referencing the David paper, and reinforce David’s argument with another factually wrong example (Beta vs. VHS) that was used by Brian Arthur for the same purpose (path dependence due to network effects).

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