Though this be madness: A game-theoretic perspective on the Brexit negotiations

Athanassios Pitsoulis and Soeren Schwuchow

VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy from Verein für Socialpolitik / German Economic Association

Abstract: On June 19, 2017 the European Union and the British government officially commenced negotiations on the terms of the British exit from the union. The dominant view among most economic policy analysts and commentators seems to be that the cards are clearly stacked against Britain and that the high-handed behaviour of the British representatives is, at best, either a bluff or, at worst, a sign of a loss of reality. In this paper we develop a formal model to show how this uncertainty regarding the preferences and strategy of the British side may affect the dynamic of the negotiations and may lead to unanticipated outcomes.

Keywords: Brexit; game theory; madman strategy; trembling-hand perfection (search for similar items in EconPapers)
JEL-codes: D78 E65 H12 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-eec, nep-gth, nep-int and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc18:181635

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