Greece’s high-stakes gamble

ATHENS, Greece -- The audacity of no hope creates strange and interesting political behaviors and a willingness to take on unimaginable risks. Today, Greece seems to be surrendering to a debt agreement that will stop the drama, but not entirely end the country’s seemingly hopeless economic situation and debtors’ prison. A few days ago, the unanswerable question was if Greece would leave the euro and the European Union.

 Pensioners wave ticket numbers as they try to get inside a National Bank of Greece branch in Athens last week. Elderly pensioners were stuck without monthly stipends as Greece deals with its financial crisis. | Simon Dawson Bloomberg News

Pensioners wave ticket numbers as they try to get inside a National Bank of Greece branch in Athens last week. Elderly pensioners were stuck without monthly stipends as Greece deals with its financial crisis. | Simon Dawson Bloomberg News

Political analysts are now asking: What kind of existential game was Greece playing during the six-month standoff with the EU? As of late last week, it was not at all clear that it would end this way. Why? Game theory gives us some insight.

Game theory is a formal study of strategic decision-making. It is how mathematicians, political scientists, defense specialists, economists and others try to predict or create desired outcomes. The recently deceased John Nash was a master game theoretician who, as depicted in the movie “A Beautiful Mind,” showed that “every man for himself” was not the way a group of guys could pick up women in a bar. How was this relevant to Athens’ predicament? Game theory shows a way.  Read more