It’s a Friday night in the late 1950s and you look like James Dean. You take one last puff of your cigarette and then toss it out of your car’s window. The cool air hits you. At the opposite end of the road in a car not unlike yours is Biff, that smug guy you could never seem able to get along with, or even try to. Gathered around the road is right about everyone you know. For the sake of the story let’s pretend Johnny B. Goode is playing on the radio. You turn off the radio. Goode is not who you’ll B. tonight.
As the prettiest girl in your gang who might just be Natalie Wood throws away her scarf, you both hit the pedal. The game of Chicken has begun.
So it’s a cool-aired Friday night and you and Biff are driving towards each other at full speed. Each of you has two moves available: you can either drive straight or swerve. The first one to swerve is a chicken. So if you keep driving straight and Biff swerves, that proves everyone Biff is a nothing but a coward and you’re a real tough guy. If none of you swerves, you both crash and end up in the hospital, possibly in the same room. If both of you swerve at the same time, you’re a bunch of chicken who shouldn’t have been out so late on a cool-aired Friday night in the late 1950s in the first place. Chicken is a game of reputation.
Now of course you and Biff each prefer the outcome in which the other swerves first. However both of you also value your lives and do not wish to spend time in the hospital, especially not together, so you’re both also very keen to avoid crashing. If only you could do a bit more than just an angry frown to make Biff trust that you will be 200% driving straight.
Turns out you can. You, the James Dean look-a-like, will make what game theorists call an irreversible commitment. You disconnect your steering wheel and throw it out the window.
Now you have no other choice but to drive straight. And Biff knows this, because he’s just watched you throw your steering wheel out the window as if it were a cigarette butt. So he swerves. Smart guy, you think, broken ribs are worse than a broken reputation, citing the Game Theory lecturer you never had. And you? You roll out of the car just before it hits a stop sign at the other end of the road. Yes, you’ve just crashed your old man’s car, but at least you’re not a chicken. You’re a real tough guy.
Fast-forward to Brexit
It’s summer 2019 and you’re Boris Johnson. The heat wave hits you. You just got elected as Britain’s Prime Minister. At the opposite end of the Channel is the European Union and you’re playing Chicken again, only now you call it the Brexit negotiations. Or simply Brexit. It has a special ring to it, don’t you think?
Like in the original version of the game, you and the EU each have two moves available: you can either push that Britain will leave the EU do or die on October 31, even without a deal which is the current default option, or you can chicken out, which can mean many things that are esentially not a no-deal Brexit, from calling a people’s vote on Brexit, to trying to galavnise cross-party support for some kind of deal with the EU, like the one that Parliament has already rejected three times. Similarly, the EU can stick to its ground and act tough, refusing as it has for a long time to rengegotiate the Brexit deal it reached under Theresa May’s tenure as Britain’s Prime Minister. Or it can soften up and agree to renegotiate the deal.
Brexit is also a game of reputation.
Because you’ve played the game before back in the late 50s, you, Boris Johnson, know what to do to win. Why of course, disconnect the steering wheel. Suspend Parliament, so that there is no time to devise an orderly Brexit agreement. Make a no-deal Brexit imminent. Make a crash imminent. Unless the EU chickens out, that is, agrees to renegotiate and give you what you want.
By making an irreversible commitment for a no-deal Brexit, you effectively wipe out the first column. This situation basically forces the EU’s hand to renegotiate the deal, because that outcomes yields the highest payoff, or the lowest loss, given the circumstances. So Boris wins.
So a no-deal Brexit is actually a winning strategy?
Not necessarily. The payoffs above rely on the assumption that the players, Boris and the EU, are equal in all aspects: what they lose from being a chicken and what much they gain from appearing tough, given what the other is doing. This is likely untrue.
The EU may face a hard time after a no-deal Brexit. The global economic slowdown is being felt in the German industry, while the increase in government borrowing in Italy is served with saucy political squandering. But fragile as it may be, the EU is likely to stay firm to its ground, looking after its stability in the long run.
“It’s about protecting the functionality and integrity of the single market. The E.U. is willing to accept a short-term economic shock in order to protect its long term economic interest”, Mujtaba Rahman, managing director for the Eurasia Group, a risk consultancy based in London, declared for the New York Times.
Meanwhile given a no-deal Brexit, the UK is posed to face economic mayhem. According to government documents leaked last month, ports disruption and fuel, food and medicine shortages are expected, as well as a hard border with Ireland. Resulting political and economic grievances could provide a blow that may prove fatal to you, Boris, in the next general election.
This changes everything. Now a no deal, no renegotiations outcome would hurt you more than it would hurt the EU. So when you would push for a no-deal Brexit, the EU would be actually be better off staying tough and refusing to negotiate. So you, Boris, are now both tough and a loser.
But a no-deal Brexit is now off the table, right?
It appears so. Last week, the British Parliament delivered a double blow to Boris Johnson, blocking both the option of leaving the EU without an agreement and his plan to push for a general election. It’s funny that you, Boris, wouldn’t remeber that. This move is the equivalent of an irreversible commitment to be a chicken, in Boris tongue.
What this means is that the right column is now crossed off. Under this scenario, the EU would again choose not to negotiate, leading to the no negotiations, deal/referendum outcome. So you, Boris, are now a chicken, but at least you lost less than you could have.
Now all there is to do is figure out what a no no-deal Brexit actually means.
