Issue #47: A Stag, a Rabbit, and a Prisoner Walk Into a Bar 🦌🐇
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No one loves a leadership analogy drawn from current events more than I do.

So let’s talk about those tariffs, shall we?

Set aside the fact that even the free-market mandarins of Palo Alto—the former architects and seemingly last conservative-leaning defenders of Pax Americana, the Brooks Brothers–wearing scions of Stanford, the Hoover Institution itself—think Donald Trump’s tariffs are bonkers.

Let’s just talk about what it means when a powerful actor does something unexpected.

By unexpected, I don’t mean Trump somehow surprised everyone by putting "America First." I mean unexpected in the sense that the United States had, for nearly a century, been one of the few constants in global economic coordination. By promoting open markets and making the world safe for capitalism—demonstrably lifting billions at home and abroad out of poverty—the United States became the World’s Only Economic Superpower, in which capacity it was able to set the rules of the trade game and become the world’s currency safe haven.

Because as much as everyone knew President Trump was America First, nobody really believed he would do something which:

1. So spectacularly backfired the last time it was tried that it tanked global trade and both deepened and prolonged the Great Depression, and
2. Would completely reverse a policy that allowed America to enjoy an unequaled run as The World’s Only Economic Superpower, with all that entailed in terms of GDP growth, cheap goods, and the privileges of being the world’s reserve currency.

It’s not that the U.S. hasn’t acted in its own interest before, either. But it has typically done so within the framework of an implicit bargain—one that other countries could predict, align with, and build around—and one that literally created the Pax Americana. And even if you set that Smoot-Hawley historical comparison aside, the decision to weaponize tariffs like this unravels one of the core tenets of America’s global economic primacy: consistency. Trustworthiness. A belief that we wouldn’t suddenly flip the board.

Because whatever you believe of President Trump’s actions, he has acted in a way that flips the board. And once you flip the board, people don’t keep playing the same game.

Stags and Prisoners

In game theory, there’s a difference between a coordination game and a competition game—and leadership often lives in the space between them.

In a Stag Hunt, the idea is simple: if we both work together, we get the best possible outcome—we bring down the big stag. If either of us hedges, we will have to content ourselves with smaller game—a rabbit instead. Rabbits are fine. Rabbits are safe. But they’re not transformative. What matters in the Stag Hunt is that both paths—both parties cooperating or both parties doing their own thing—are stable outcomes. They are what’s called equilibria in the language of game theory. The better outcome requires trust, but the fallback is okay too.

More of you are probably familiar with the Prisoner’s Dilemma. In a prisoner’s dilemma there is only one stable outcome: we both defect. Even if we’d both be better off cooperating, we can’t risk being the one who stays loyal while the other flips. The fear of betrayal drives us to protect ourselves—and in doing so, we guarantee a worse result for everyone.

What’s powerful—and dangerous—is that these games aren’t fixed. You can shift a Stag Hunt into a Prisoner’s Dilemma just by shaking trust. That’s exactly what “Liberation Day” did.

Trump’s tariffs didn’t just change policy: they signaled that coordination is off the table. Now other countries must assume that the U.S. might defect again, which means they must do what rational actors do in that kind of world: they hedge, they retaliate, and they plan for a future where cooperation isn't the norm, but the exception.

In companies, the same dynamic plays out. A leader who says one thing and does another, who rewards internal competition or punishes vulnerability, can accidentally change the game everyone thought they were playing. What was once a team aligned around a shared mission becomes a room full of rabbit-chasers—or worse, a collection of players trying to avoid being the sucker in a zero-sum game.

You can’t lead well if you don’t know which game you’re in. And you can’t lead at all if you’ve broken the one everyone thought they were playing.