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Brexit – Leveraging Game Theory to Pass EU Deal in Parliament

In 2016, with the successful passing of a referendum in the British Parliament, the United Kingdom (U.K.) voted to begin the separation process from the European Union (EU), known to many as “Brexit.” This past week, the proposed separation deal was approved by a majority of EU leaders, putting the fate of the legislation, and its enclosed terms, up to a vote in Parliament. Theresa May, Prime Minister of the U.K. and the main proponent of the deal’s exit agreements, is facing an upwards battle struggling to convince parliament members of two factions of Britain’s Tory (conservative) party to approve the legislation. Both factions, called the Remainers and Brexiteers, each want to oppose the deal for different reasons, threatening to leave the entire nation with no closure agreement after the EU separation is finalized in 2019. The Tory-Remainers hope that opposing the deal will result in a second referendum whereas Brexiteers want to improve on the deal, both of which are not achieved with the deal’s approval in Parliament. The article attached below analyzes how Theresa May is utilizing elements of the Prisoner’s Dilemma in Game Theory to corner both groups into voting in favor of the deal, even though it might appear to act against their best interests.

The game arises when we view each political faction as players in a 2-way game by which only two strategies exist: voting for or against the deal in Parliament. If both vote for the deal, then the perceived costs are high as both groups fundamentally oppose some outcome that would occur as a result of the deal successfully passing. If both choose to vote against the bill, then the costs are low as both receive some aspects of their desired outcomes with the deal’s rejection. Alternatively, the Prime Minister can interfere with the cost structure of this game by convincing both groups that voting in favor of the deal is more desirable as it results in positive outcomes for them and negative ones for the other group, independent of the opponents’ choice. Theresa May is currently employing these tactics by convincing Remainers that a second referendum is impossible and by convincing Brexiteers that the current deal is the only possible one. In doing so, she is getting both sides to believe that voting in favor of the deal is the lowest cost strategy. In class, we learned that the Prisoner’s Dilemma results in a Nash equilibrium that places both players in a best response to the other player’s strategy even if it’s against their best, collective interests. Theresa May is leveraging this game theory dynamic by manipulating both factions into voting for the deal, even though their payoffs would be higher by cooperating initially to vote against it in order to achieve their party’s political goals.




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November 2018