Usefulness of Metagame AnalysisAuthor(s): Nigel HowardSource: The Journal of the Operational Research Society, Vol. 37, No. 4 (Apr., 1986), pp. 430-432Published by: Palgrave Macmillan Journals on behalf of the Operational Research SocietyStable URL: http://www.jstor.org/stable/2582572 .

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Journal of the Operational Research Society Vol. 37, No. 4

and the ith replenishment interval is obtained from the following:

2M b (ti + ' )

(for i > 2). Using the above approach, an average cost penalty of 0.3% was obtained on a sample of 60

examples involving items having linearly increasing trend in demand.

Concordia University S. K. GOYAL Montreal

REFERENCES

1. E. RITCHIE and A. TSADO (1985) Stock replenishment quantities for unbounded linear increasing demand: an interesting consequence of the optimal policy. J. Opl Res. Soc. 36, 737-739.

2. W. A. DONALDSON (1977) Inventory replenishment policy for a linear trend in demand-an optimal solution. J. Opl Res. Soc. 28, 663-670.

3. S. K. GOYAL (1986) On improving replenishment policies for linear trend in demand. Enging Costs Prodn Econ. In press.

USEFULNESS OF METAGAME ANALYSIS

May I comment on Lyn Thomas'1 assessment, in his review of Fraser and Hipel's Conflict Analysis, of the usefulness of metagame analysis? Of course he is right to suggest that metagame analysis is not much use in solving-or 'resolving'-problems. But I think it should be pointed out that it was never designed to do so! In assigning this purpose to it, Fraser and Hipel have changed the original purpose of metagame analysis.

If it was and is of little use in solving problems, what use is metagame analysis? The answer, I suggest, is to improve decision-making. But how?

One can divide decision-making into three stages, each of which interacts over time with the other two. They are:

'technical' planning, which includes analysis of the available options, their consequences, and their effects on different parties and the common interest of all parties;

'political' planning, in which each party separately decides how to approach the others, and what inducements promises, threats and rational arguments to use to try to get the kind of outcome it prefers;

the interaction itself, in which parties advance arguments, take up positions, and exchange information about their intentions, whether through actual negotiations or at a distance from each other. It is here that the 'decision' as such is reached-though major decisions may be put together piecemeal over a period of time.

The unique usefulness of metagame analysis is as a formal, structured way of carrying out the second, 'political' planning stage. Many formal methods exist for the first, 'technical' stage including scientific, financial and engineering studies, as well as O.R. and systems-theoretic methods of problem formulation and solution. But the lack of formal methods for 'political' planning has often led to delays and wastage, as enthusiastic proponents of sound 'technical' ideas fail to enlist the cooperation of others.

To fill this gap, the special metagame philosophy of decision-making is to subject 'technical' considerations to a structured kind of 'political' analysis before presenting them as arguments to the other parties involved. This enables decision-makers to prepare their ground adequately before interacting- with others.

To carry out such a metagame analysis, the decision-makers responsible for interacting with others normally work in a task force containing selected managers belonging to their party. A

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Letters and Viewpoints

metagame analyst proceeds to ask questions, which the task force answers using its own judgement and sources of information. By doing so, it builds up a deductive model from which conclusions can be drawn about:

the negotiable 'stable scenarios' i.e. the decisions which are possible given that each party must pursue the common interest in the light of its own particular interests;

for each possible 'stable scenario', the promises and threats each party would need to make credible in order to bring about that scenario;

hence the emotions of goodwill and desire to cooperate, or of anger and frustration that are needed and likely to be generated in the course of the interaction;

likewise the tendencies for parties to behave irrationally (i.e. against their own preferences) or change their preferences, and to deceive each other or disbelieve each others' statements. It is pointed out where, why and how such tendencies will exist.

(Here I should point out that the Fraser-Hipel modification to metagame analysis i.e. the assumption that credible reactions must be 'rational' effectively assumes away the importance of negative emotions such as anger, with the possibilities of irrational behaviour and preference change that accompany them; also it assumes away certain possibilities of deceit and disbelief. Thus Fraser and Hipel would make it impossible to do much of the above analysis, while of course succeeding in their quite different aim, which is to narrow down the set of possible solutions. It is regrettable that, in order to succeed in this aim, they are willing, like many academics, to make unrealistic assumptions about human rationality.)

The conclusions mentioned are drawn from the task force's assumptions by the analyst, and are then summed up in the type of diagram called a 'strategic map'. This is readily understood by non-specialists who can see in it the effect of the assumptions they have made. Thus the decision-makers who will use the analysis feel they own it.

The decision-makers use the metagame analysis in deciding what to do next both on the 'technical' side and in their interactions with other parties.

First, the analysis will raise specific and obviously important questions which they feel unsure how to answer so they will seek to answer them 'technically'.

Second, the analysis will give them guidance on how to deal with other parties-what arguments to put forward, what implicit threats and promises to make, what emotional tone to adopt and expect, what responses to anticipate, what can and cannot be taken at face value in others' responses, and so on.

What, then, is the usefulness of the metagame analysis, given that not only does it not solve the problem, it may not even add constraints to the solution space often, instead, it expands it by opening up possibilities not hitherto considered?

In general, better decisions are made more smoothly and with less delay. This is because of the following:

More effective interaction with other parties. The other parties involved in the decision may be internal other departments, superiors, subordinates or external unions, other companies, governments or government departments. Using metagame analysis before interacting with them can dramatically improve performance. It is like entering a new country with a map, instead of without one.

Improved utilization of information. Often it is not clear exactly what information is needed by the ultimately responsible decision-makers. They can be given both too much (irrelevant) information and too little information that is relevant. The metagame analysis leads them to ask specific questions which are seen to be the relevant ones. This enables them to make specific requests for information which their organization can answer in the sense intended without necessarily knowing why the question is asked! The result is greatly improved utilization of analytic and investigatory resources including O.R. and systems analysis.

Ability to update decision-makers' view of the interaction quickly and easily. New and surprising information, whether 'technical' or coming out of interactions with other parties e.g. when their reaction is quite different from what was expected often seems to throw doubt on the whole

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Journal of the Operational Research Society Vol. 37, No. 4

approach used so far. A complete, time-consuming rethink seems needed. Using a metagame model, it is often found that just a few assumptions need to be altered, with effects that can quickly be traced through. The expected 'complete rethink' can often be accomplished during a break in negotiations. The result is not only improved effectiveness, but increased productivity due to time saved in not having to go over old ground.

Improved communication and liaison with other departments. The considerations which affect negotiations or, more generally, interactions with other parties are often intuitively felt and hence difficult to explain to other parties in the organization who need to know them-e.g. board members, other departments, and subordinate or superior levels of management. Metagame analysis does solve this problem, making it possible to exhibit 'political' reasoning as clearly as, say, the reasoning in a financial model, showing how a strategy is based on assumptions made and asking those who question it to say which assumption they question. So internal parties can gain a common understanding of a strategy and contribute to it in a unified way.

These advantages of metagame analysis have been experienced in applications whenever an interactive analysis has been done directly with the ultimate 'political' decision-makers-i.e. those responsible for the policy decision that finally sticks, which is to say the one that is finally accepted, expected and intended by all the different parties involved. (To give just one example, unusual in that it can be mentioned here: I did useful work recently with the managers of a District Health Authority who wanted to change the organization of a hospital-a change which needed, but seemed not to be getting, the cooperation of the clinicians.)

But when, as in Fraser and Hipel's work, a non-interactive analysis is done for non-decision- makers, such advantages cannot appear. In general, outside observers, or 'technicians' responsible for decision support (meaning analysis of the effects and repercussions of courses of action) have a different perspective and legitimately different needs from those of the decision-maker. The outsider, in effect, occupies the role of the observer in the traditional paradigm of science. His role is to narrow down the set of possibilities by the two rational methods of prediction and prescription. The decision-maker, on the other hand, like the subject who defies the pronouncements of science in feeling she has 'free will', strives instead to open up possibilities, in order to widen the space available for negotiating a cooperative understanding with others whom she is involved with in creative, emotional interaction.

Of course, the 'technical' adviser and the decision-maker need each other. But their different needs should not be confused.

Nigel Howard Systems, Birmingham NIGEL HOWARD

REFERENCE

1. L. THOMAS (1985) Review of Conflict Analysis: Models and Resolutions by N. M. FRASER and K. W. HIPEL. J. Opl Res. Soc. 36, 972-973.

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