To be frank with you, I don’t consider myself as a person who understands and enjoys in macroeconomics. This is for me a totally uninteresting field but when macroeconomics meets presentations and psychology, things become more interesting. Mr Varoufakis the rakish guy who negotiates with EU officials wearing leather motorcycle jacket knows very well that a combination of the game theory knowledge and great presentation skills can make a outstanding advantage in front of any audience. It’s true that Greece is currently in not such a good shape and role because it’s “default” status (not bankruptcy because countries can’t go into bankruptcy) but countries like Germany or France expect the payback which Greece knows very well.
The intense and negotiations between the main two players, Greece and all creditors for months already is reaching the peak. In worst case not making a deal leaves everybody worse off so this is not a common interest. Because the current “default” everyone is in the least desirable outcome and according to Dr Nash we enter now in the so-called Nash equilibriums that may produce suboptimal results. Such equilibrium is happening when each side’s strategy is optimal given what they believe to be the other’s strategy. For instance, if France or others don’t believe Greece to stay longer in the default status, and underestimate the strength of such outcome they might see their optimal strategy as remaining firm in their demand for Greek fiscal austerity and reforms.
Greece with his personal beautiful mind, Varoufakis knows very well how to play chess and the game theory. If you analyse the presentations, public reactions and interactions between those two players you can easily see that actually Greece is ruling the game. Personally I believe that Greece will somehow turn the lose-win into a win-lose for them. Anyway, it is not the first time that G7 countries wont get their mont back from Greece and this can be a strong card in the hands of Varoufakis as well. Not to repeat history.