The game between Britain and the EU

France and Spain are pushing for extra EU demands on Brexit, which will further complicate Theresa May's efforts to win the Parliament support for her proposed withdrawal agreement. Yesterday I suggested that Theresa May will eventually gain the support from the pro-Brexit politicians and some anti-Brexit politicians. The negotiation with the EU is a finite horizon bargaining game with discrete choices. The outcome of a finite horizon bargaining game depends on who makes the last move.

The EU is at an advantageous position of this negotiation, because the EU has a final say about whether it will accept or decline Britain's proposed plan. The EU can offer a counter offer; the EU can offer any counter offer which can just make Britain a tiny little bit better off comparing with the no-deal scenario, and Britain will accept the offer if the British politicians are completely rational and do not react revengously, because they do not have the chance to offer any counter offer.

However, we should not expect politicians act completely rationally, it is very likely to see politicians behaving revengously, since such behaviour will win more public support for them, especially when they do not need to take full responsibility of the national fate as the Prime Minister does.

Therefore, the probability of a no deal Brexit is very high, especially when the EU is taking this path.