A GAME THEORY APPROACH

5.3.3. A GAME THEORY APPROACH

Individual everywhere are part of social, political, and economic networks in which the behavior of others influences their own best choice. A situation in which people’s choice and

welfare are independent in this way is called a game. The solution to a game largely relies on the institution framework within which the game is played. Institutions define the framework within which social, political, and economic interaction take place.

5 Previous positions included the presidency of the ASEAN Business Forum for two consecutive terms from 1991 to 1995, and the chairmanship of the Indonesian Chamber of Commerce and Industry (KADIN) for two consecutive

terms from 1994 to 2004. As a member of the Golkar party, Bakrie competed unsuccessfully to become Golkar's candidate for the presidency in 2004; Eventually General Wiranto became the party's candidate.

The coal mining activities reduced the access of Dayak Basab tribe in Segading. The company planned to utilize lands nearby the village which would cross only one access for Segading community. While the company set up high standard for mining access, anyone would not be able to pass the road. Only official vehicle would be allowed to pass the street.

If that so, there would be three options for the communities. As shown in Table 5.1., the community can choose: (a) to move to Bajangtidung, or (b) to go back to Karaitan (the ancestor land), or (c) to find another new places (unknown places). On the other hand, the company would have at least three options. As presented in each row of Table 5.1, the three options are: (1) to bargain to get the best price with lowest cost, (2) to facilitate the transformation process of community development for certain years and at the same time pay land compensation, (3) to facilitate the whole transformation process.

As the KPC is the leader in this game, the best solution for the company is to choose the first option. The company tends to pay land compensation only to the community, since this option gives the maximum utility to the company. If it is the case, the Dayak Basab as the follower, have only three captive options, which might lead to three different solutions.

The following is the situation that might be faced by Dayak Basab, if it is assumed that the KPC chooses to pay only land compensation (see Table 5.1).

The First Option: If the tribe moves to Segading, a small mining town, they will easily get basic rights (i.e. education and health facilities). They should develop basic entrepreneurship skills. While it is a total transformation from a traditional hunter community which entirely rely on forest resources into a trader community which has not only ability to trade and take a risk, it might take one-generation time or about 50 years. During one in depth interview, a senior tribe member pointed that it is impossible for them to transform into traders, which seems to be a lower level of community class. Moreover, they also feel irritated with other communities in the town.

The Second Option: the Dayak Basap tribe could go back to their ancestor’s land in a remote area, Karaitan. They would be more flexible to manage the traditional cultivation as they have done for hundred years. On the other hand, they should be able to live without basic services, such as electricity, education, and health services. Recently the modern facilities have enhanced the way of life in many ways. The male rides motorcycle whenever they go to land field, while the house wife enjoy chatting by the telephone.

The third option: each family could sell of their land and spend all the money for a new place. They would make a living in different part of the places. This means that it is no more Dayak Basab community. The worst experiences thought them how difficult to make a living in a new territory.

TABLE 5.1: STRATEGIES OF COMPETITION BETWEEN KPC AND DAYAK BASAP

Basap’s strategies

Stay at

Back to ancestor

Unknown places.

Bajangtidung

land Karaitan

Scenario

Land

1. Riskiest on

the foreign

4. Surviving on

5. Modernizing the

6. Find the rest of

between

land the foreign land jungle.

battles.

compensation KPC and community

development program Community

7. Nurturing the

8. Civilizing the

9. Sleeping with the

Source: Authors’ investigation based on Focus Group Discussion and surveys on the community and on the MNC.