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Game Theory and the Prisoner’s Dilemma – Brexit

Source: https://www.bloomberg.com/opinion/articles/2019-01-30/theresa-may-s-brexit-gambit-is-a-loser-says-game-theory

This article talks about how game theory and the prisoner’s dilemma relate to the issue of Brexit. The article makes the point that the UK and its parliament are trying to play a game of prisoner’s dilemma with the European Union, but the EU is also playing a game of prisoner’s dilemma. In this situation, the UK parliament wanted Theresa May to secure a better deal from the EU. They assumed that the EU would bow down to their needs and go for a deal that is better than the one that the UK was being originally offered. In this case, the UK was using a strategy that was purely in their self-interest. Instead of trying to cooperate, the UK was using their dominant strategy, which was being ready to leave the deal if the EU did not try to work with parliament in order to create a deal better suited for the UK.

The article states that groups or people that have higher payoffs if they do something have a greater chance of cooperating than people with lower payoffs, based on experiments conducted. Thus, in this case, the UK claimed that the EU had more of an incentive to cooperate with the UK on a better deal than the incentive that the UK had to accept the deal currently being presented. The parliament was using the logic that the EU would have a higher payoff by trying to cooperate with the UK. We learned in class that people prefer larger payoffs, so the parliament assumed that the EU would try to work to cooperate further.

Now, we look at the the EU’s side of the game. The article states that for the EU, the game is not only about Brexit. It also pertains to other countries in the EU, who might want to follow the UK’s lead and try to avoid rules set by the EU. The article mentions that the EU would want to try to look at cooperating with the UK and potentially coming to a deal that is more favorable for the UK. However, since there are other countries that could try to do the same thing that the UK is doing, the EU would want to choose to defect instead of cooperate in order to set a standard. If the EU defects, they will refuse to cooperate with both the UK and other countries that could potentially try to leave the EU.

We can now see the effects of the prisoner’s dilemma. If both the UK and the EU choose to defect instead of cooperate, no deal will be reached. This will lead to negative consequences for both parties. As we learned, in prisoner’s dilemma, if both people involved choose what they believe is best for them, their dominant strategy, the results will not be good for either person. This is demonstrated by Brexit and whether or not the UK and the EU will choose to work towards a new deal for the UK to stay in the EU.

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