When it comes to world finance, the “no deal” option may be better. But in the case of the Greek / EU dynamic, it leaves all players: Greece, creditors and the European Union at large, worse off than restructuring. But second best can be the best from a game theory perspective. Indeed, this may be the equilibrium the world financial markets need to see, and this may not be a Greek tragedy but the best possible outcome.
Payoffs include common interests such as currency stabilization, reduction in migration, decreasing default. The New York Times explains the debt crisis and what the options are, payoffs, players and probabilities.The complete article is here: http://www.nytimes.com/2015/06/05/business/in-greek-debt-puzzle-the-game-theorists-have-it.html
It is not surprising the lead negotiator,Yanis Varoufakis, who’s quote above is a key to understanding the game theory perspective, is a game theorist himself. The best result for Greece is admittedly be suboptimal, but also it is not the best outcome for creditors. So running a game theory strategy may be seen as a great path for negotiation teams as they put their efforts on autopilot.
But Varoufakis uses another tactic, downplaying when he analogizes: Greece brining down world financial markets would be like Delaware’s economic policies brining down the economy of the United States. The problem, he opines, is the financial market frailties themselves, not attributable to Greece. This is a professional negotiator in action advocating for this client on the strategic and tactical levels.