Utilizing Game Theory to Understand Critical Decision Making in Politics
http://www.politics.co.uk/comment-analysis/2017/03/15/the-game-theory-of-brexit
As the world becomes increasingly global, it is important to analyze major events through different analytical lenses before forming a conclusion. One of the most impactful events on an international level in 2017 was Brexit, Great Britain leaving the European Union. This event had rippling effects throughout the European Union and the greater global community. After the event, many were looking to point fingers at a single trigger of the event. Instead of attributing Brexit to one specific moment, this article looks at the events leading up to Brexit through the lens of game theory which we discussed in Networks.
Game theory is an analytical approach that can be used in a few different capacities some of which include the likes of a pure strategy and others include a mixed strategy. It can arise in any context and is used to model the level of connection in different behaviors. It helps to analyze dependent outcomes. Sometimes this means addressing different decision-making paths and other times it tackles a lack of analysis. Familiar scenarios we deep dove into in class related to game theory include Nash equilibrium as well as the prisoner’s dilemma.
This analysis by Dr. Neil McCulloch certainly addresses the power of decision-making through game theory. Through his research, we are able to see how the impact of the scale of severity of decisions as well as options chosen by major players interact and manifest in real-world events.
In this scenario, McCulloch values the events of Brexit making one player the UK and the other player the EU. Within this framework, he contemplates scenarios in which the EU offers a good or bad deal and then based on that the UK either accepts or denies the prospective deal. Based on the outcomes related to good or bad deals offered and accepted by either player, valuations are determined respectively. From there, the article examines the strategy from the UK perspective and then from the EU perspective. Taking into consideration both sides, a dominant strategy is offered that poses the most economic benefit for both parties. Ideally, this would be for the EU to offer the UK a good deal. The conclusion is driven by economic and political payoffs wherein the type of deal is indifferent to the EU but impactful in the UK. The weight of politics and economics is enormous on whether the EU offers the UK a good deal. Ultimately, it appears the EU will offer a mediocre deal to the UK which will be accepted.
The article then further examines the additional factor of the Irish courts’ decision making through the lens of game theory. I thought was an extremely interesting and complex addition that further challenges traditional analysis. Ultimately, this factors in another option for the UK in relation to the deal given by the EU which is to stay in the EU. This is in a contest with the other two options to accept or decline the deal. In this scenario, the stakes are raised from one mediocre deal to two polar options that critically affect the well-being of the UK both economically and politically.