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Guardian - Larry Elliot - Boris Johnson takes note of Trump's game theory to keep EU guessing on Brexit

Two cars are hurtling towards each other down a narrow country lane. Both have the option to pull over but neither driver wants to give way first. What happens next? This is the sort of scenario that lies at the heart of game theory, the use of models to show how rational decision-makers interact with each other. Game theory is big in economics and, in the current circumstances, that's hardly surprising because two key political issues lend themselves to game theory analysis.
Boris Johnson has arrived in Downing Street and has reshaped the cabinet so that it is run by Brexit true believers rather than those who backed remain in the referendum. Preparations for a no-deal departure have been ramped up in order to show the rest of the EU that the government means what it says. Johnson has made it clear that he is in no hurry to start negotiations and, by spraying money, is creating the impression that he would be willing to call a general election in order to get a mandate for his tougher Brexit approach. From a game theory perspective, all this makes complete sense. Like Trump with Xi, the prime minister is trying to keep the EU guessing.

What is potentially helpful to the new prime minister is that the eurozone economy is in worse shape than it was a year ago. Germany, in particular, is struggling. Its manufacturing exports have been hit by the global slowdown and Berlin fears it will be targeted by Trump when he launches the second front in the trade war. Angela Merkel does not want a no-deal Brexit.
Leo Varadkar is worried about the impact of a no-deal Brexit on the Irish economy. What should also concern the taoiseach is whether the EU would be prepared to sell Ireland out in order to avoid one.

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Mon Aug 5th, 2019 at 07:29:13 PM EST
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