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Brexit and the Nash Trap

by Greg Rooney
July 2016 Greg Rooney

The decision to leave the EU has drawn the UK into the Nash Trap. 

U.S. mathematician John Nash (the movie The Beautiful Mind) postulated that Adam Smith’s declaration that ‘ In competition, individual ambition serves the common good' (the leave approach) was incomplete.

Instead the best result is for everyone in the group doing what’s best for himself AND the group (the remain approach). This became known as the Nash Equilibrium and won him a share of the Nobel Prize for Economic Sciences.  

The decision by the UK to act independently in an attempt to maximise its own self interest (defecting) quickly leads to the EU also defecting.

Nash postulated that a point of balance is quickly reached in which either side cannot independently escape without suffering a loss. He called this trap the Nash Equilibrium which he postulated was lying in wait for every situation of competition and conflict in which parties are unwilling or unable to communicate and collaborate.

The Nash equilibrium illustrates a basic principal of game theory. His theory is designed to work in a non-cooperative game in which each player makes a decision independently of the others.

The point of the Nash equilibrium however is that the choices you make should depend on what everyone else does. You should choose the best possible position for yourself based on what everyone else is doing and thus you all reach equilibrium.

Lyndsey Browning looked at cooperation and the question as to how it ever evolved in the animal kingdom. If the fittest always survived then why would any living thing want to cooperate? She looked for answers in game theory particularly the prisoner’s dilemma or the XY game. A worldwide competition was won by Anatol Rapoport whose winning strategy was dubbed ‘tit-for-tat.’

Rapoport’s approach was tested many times in different games and always won - always start by being cooperative but return defection for defection and cooperation for cooperation. Nonetheless be forgiving and fair and don’t go on punishing more than once after a defection.

This approach to working with an external group opens the door to the concept of reciprocity or sense of fair play and works as a bridge or pathway towards sustained collaboration.

The UK has abandoned this option. The net effect of the Brexit vote is that the UK is transitioning from being a big fish in a collaborative big pond (the EU) to a big fish in a small pond (England, Wales and possibly Scotland). 

The UK will still relate to the rest of the world but from a far smaller economic base. Germany, as the economic leader of a collaborative Europe, will be in a far superior position.  The irony is that this is the position that 19th and 20th century Britain feared most.

ENDNOTES:

Fisher, L. Rock, Paper, Scissors – Game Theory in Everyday Life.  Basic Books, New York.

Mc Taggart, L.“Connecting Through the Space Between Us - The Bond” 2011 Free Press, New York

Biography


Greg Rooney has been a mediator in private practice in Australia for 25 years. He has facilitated over 200 face-to-face meetings between victims of sexual and physical abuse within religious institutions and religious leaders over the last 14 years.  He has also facilitated meetings between victims of abuse within the Australian Defence Force and senior military officers and is currently developing a program for the South Australian Government for dealing with claims of abuse within the South Australian Police Force. Greg together with colleagues Margaret Ross and Barbara Wilson run, annually, a Mediation Retreat in Tuscany, Italy.


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