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Metagame analysis involves framing a problem situation as a strategic game in which participants try to realise their objectives by means of the options available to them. The subsequent meta-analysis of this game gives insight in possible strategies and their outcome.
Metagame theory was developed by Nigel Howard in the 1960s as a reconstruction of mathematical game theory on a non-quantitative basis, hoping that it would thereby make more practical and intuitive sense ( Howard 1971 , pp. xi). Metagame analysis reflects on a problem in terms of decision issues, and stakeholders who may exert different options to gain control over these issues. The analysis reveals what likely scenarios exist, and who has the power to control the course of events. The practical application of metagame theory is based on the analysis of options method, first applied to study problems like the strategic arms race and nuclear proliferation.
Metagame analysis proceeds in three phases: analysis of options, scenario development, and scenario analysis.
The first phase of analysis of options consists of the following four steps:
The dependencies between options should typically be formulated as "option X can only be implemented if option Y is also implemented", or "options Y and Z are mutually exclusive". The result is a metagame model, which can then be analysed in different ways.
The possible outcomes of the game, based on the combination of options, are called scenarios. In theory, a game with N stakeholders s1, ..., sN who have Oi options (i = 1, ..., N), there are O1×...×ON possible outcomes. As the number of stakeholders and the number of the options they have increase, the number of scenarios will increase steeply due to a combinatorial explosion. Conversely, the dependencies between options will reduce the number of scenarios, because they rule out those containing logically or physically impossible combinations of options.
If the set of feasible scenarios is too large to be analysed in full, some combinations may be eliminated because the analyst judges them to be not worth considering. When doing so, the analyst should take care to preserve these particular types of scenarios ( Howard 1989 , pp. 243 ff):
The next step in the metagame analysis consists of the actual analysis of the scenarios generated so far. This analysis centres around stability and is broken down in the following four steps ( Howard 1989 , pp. 248–255):
This analysis procedure shows that the credibility of threats and promises (sanctions and improvements) is of importance in metagame analysis. A threat or promise, one that the stakeholder prefers to carry out for its own sake, is inherently credible. Sometimes a stakeholder may want to make credible an 'involuntary' threat or promise, to use this to move the situation in the desired direction. Such threats and promises can be made credible in three basic ways: preference change, irrationality, and deceit ( Howard 1989 , pp. 257).
Metagame analysis is still used as a technique in its own right. However it has been further developed in distinct ways as the basis of more recent approaches:
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