Holding out for a better deal: Brinkmanship in the Greek bailout negotiations

Athanassios Pitsoulis and Sören C. Schwuchow

MPRA Paper from University Library of Munich, Germany

Abstract: Greece and its creditors concluded negotiations over a third bailout by signing a Memorandum of Understanding on 19 August 2015. The dominant view among most economic policy analysts and commentators seems to be that the actions of the Greek government in the months before the deal have been erratic and lacked coordination. In this paper we argue instead that the decisions of the Greek negotiators, including asking the voters to reject the earlier terms demanded by the creditors in a referendum, can be explained by the logic of brinkmanship. We develop a game-theoretic model to show that the actions of the Greek government are consistent with a strategy aimed at securing concessions, which can be used to bolster domestic approval.

Keywords: Greek debt crisis; Brinkmanship; Crisis management (search for similar items in EconPapers)
JEL-codes: D78 E65 H12 (search for similar items in EconPapers)
Date: 2015-11-13, Revised 2015-11-16
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/67918/1/MPRA_paper_67918.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/67995/8/MPRA_paper_67995.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/68291/1/MPRA_paper_68291.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/72598/16/MPRA_paper_72598.pdf revised version (application/pdf)

Related works:
Journal Article: Holding out for a better deal: Brinkmanship in the Greek bailout negotiations (2017)
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