By. Dr. John Psarouthakis, Executive Editor,
Dr. Varoufakis, the Minister of Finance, Greece, and a professor of Game Theory, made a fundamental error in negotiating strategy by setting redlines so early in the negotiating process as he and Mr. Tsipras, the Prime Minister of Greece, did!!!!
I have personally found out and learned from negotiating with banks, corporate acquisitions and government officials in many countries that the above is so true / fundamental that essentially either it results in unnecessary compromises or total failure!
Also frequent bluffing without being prepared to do what you bluff about, if the bluff is called, can result in an absolute disaster!!!!!!
The bluffing side loses credibility to the degree that negotiations
are essentially one sided from then on, or failure again.
So far it seems rather clear that the above gentlemen lack the needed experience and maturity. Game Theory is useful but not in of itself. Reality needs to enter in to the assumptions that enter in the analytical phase to help the negotiations. Game Theory was invented by the late Dr. von Neumann and expanded in economics by the recently deceased Dr. Nash is a great “tool” in strategic decision making but within the realities of the consequences if the decision is wrong!
One of Dr. Nash’s great contributions was the “Nash Equilibrium”. But even that was recently proven by the young Greek MIT professor C. Daskalakis not to be always the case. This further complicates the use of Game Theory in negotiations, etc.
Mr. Alexis Papachelas is a guest editorial writer to The Business Thinker. He is currently the Executive Editor of the long standing and highly respected daily Greek newspaper “Kathimerini
I wonder if Prime Minister Alexis Tsipras and his close aides have ever seriously questioned their strategy vis-a-vis international leaders and officials. Tsipras may be enjoying sky-high popularity in the opinion polls and he may strike a chord with our collective subconscious, but he is doing things wrong.
Take for example his Sunday op-ed in Le Monde. The article did not win him any friends or allies in Paris, Brussels or anywhere else. In it, Tsipras was either playing the blame game in the event of an impasse with Greece’s lenders or was exclusively addressing the audience at home.