Assuming that a few of you did not do the assigned reading, very quickly, the key idea is the distinction between zero sum games, in which correlations are inverse always a winner and a loser.

Asian Games Are Not Zero Sum

Asia s Game Without Frontiers

The Great Game s New Players

China s Afghan Game Plan

From Great Game to Grand Bargain

Gaming US Fiscal Reform

Now, what is game theory about?

Varoufakis s Great Game

I engage in the use of game theory, game theory is a branch of mathematics and that means, sorry, that even in the study of politics, math has come into the picture.

Russia s European Game in Syria

Amory Lovins on winning the oil endgame

You have them in hunter gatherer societies, but then through technological evolution, new forms of technology arise that facilitate or encourage the playing of non zero sum games, involving more people over larger territory.

It assumes that people are looking out for what's good for them.

During the Great Game, Afghanistan was a buffer state.

Non zero sum games in which correlations can be positive, OK.

A lot of forms of non zero sum behavior in the realm of economics and so on in everyday life often leads to cooperation.

And you can think of it in terms of a game theoretic payoff matrix.

And this is Von Neumann and Morgenstern, who wrote the Theory of Games.

The argument I make is basically that, well, non zero sum games have always been part of life.

Apparently, Varoufakis believes that his sophisticated grasp of game theory gives Greece a crucial advantage in the complicated dynamics of the negotiations. In fact, the game being played out in Europe is less like chess than like tic tac toe, where a draw is the normal outcome, but a wrong move means certain defeat.

So economists talk about game theory that every two person game has a Nash equilibrium.

Yet, so far, the threat has not worked. To understand why, we can appeal to game theory, which provides economists and others a powerful framework with which to explain the dynamics of both simple and complex interactions.

More than a century later, the game continues. But now, the number of players has exploded, those living on the chessboard have become players, and the intensity of the violence and the threats that it produces affect the entire globe.

But there's a more fundamental reason that it's not intrinsically upbeat, because a non zero sum game, all it tells you for sure is that the fortunes will be correlated for better or worse.

As a result, Realpolitik and economic interest alone will no longer shape the great game playing out in Burma. Ideals and the quest for freedom will also play a critical role.

Social structure adapts to accommodate this possibility and to harness this productive potential, so you get cities, you know, and you get all the non zero sum games you don't think about that are being played across the world.

The most recent example of this dialogue of the deaf occurred in Europe, from January to July 2015. Month after month, the Greek government and its eurozone partners sat at the board, one side thinking the game was checkers and the other thinking it was chess.

Today, there are many more players involved, and the stakes energy security, above all are far higher now. America, India, Europe, and Japan will face increasing tension between their short term military needs in the region and their long term goal of promoting political reform in order to create more stable and reliable partners.

Secondly, in the dialogue to realize the denuclearization of the peninsula, the parties concerned are still divided on the steps and ways to realize the denuclearization of the peninsula. Due to the long term lack of political trust between the DPRK and the United States, the game thinking of who is first and who is second is still strong.

The consequence is a complicated game currently exemplified by the saga of Greek voluntary restructuring in which both sides stare into the abyss and then turn away from the out and out conflict that would send them plummeting into it.

eBay solved the prisoner's dilemma and created a market where none would have existed by creating a feedback mechanism that turns a prisoner's dilemma game into an assurance game.

To find an answer requires confronting civilizational norms, which are reflected in the intellectual games that the countries favor. India has traditionally favored the game of chaupad (four sides), or shatranj (chess), concentrating on contest, conquest, and subjugation.

But that seeming parallel may be the point, meant to create fear of military action rather than actual action that will give Mr. Putin leverage with Ukraine and with Western countries.

There are several arguments for not allowing the people s representatives to intervene in the complicated foreign policy dance between force and diplomacy. For starters, there is the traditional idea that politics end at the water s edge, where messy domestic disagreements are supposed to give way to the abstraction of one state with a unified national interest.

Yanis Varoufakis, Greece s new finance minister, is a professor of mathematical economics who specializes in game theory. But his negotiating technique unpredictable oscillations between aggressiveness and weakness is the opposite of what game theory would dictate.

He thought that his old reality based friends from the Ford administration were back in power. He thought that he and Treasury Secretary Paul O Neill could win the quiet inside game for sensible policy without resorting to an outside game that would make his reappointment in 2004 unlikely.

The Spanish Government favoured the creation of virtuous circles of cooperation, enabling all the parties concerned to collaborate, making concessions and reaping positive benefits on a non zero sum basis.

So, in a way, the question is on what grounds am I upbeat at all about history? And the answer is, first of all, on balance I would say people have played their games to more win win outcomes than lose lose outcomes. On balance, I think history is a net positive in the non zero sum game department.

The objective of threatening a fiscal cliff was to force a cooperative outcome on an increasingly non cooperative game. But, in the absence of a credible enforcer (and lacking sufficient mutual assurances), participants felt that they had more to gain from continuing their non cooperative behavior.

There's a good reason that we don't do that, and there's a good reason that using game theory and computers, we can overcome the limitation of just looking at a few people.

European illusions about Asia will no longer be directed at Russia, which, apart from its natural resources, will simply have nothing to offer. No, this time, the temptation will spring from China, which well understands Europe s significance in its emerging geopolitical contest with (and against) the US.

The sum of all trade balances in the world is equal to zero, which means that not all countries can be net exporters and that currency wars end up being zero sum games. That is why America s entry into the fray was only a matter of time.

Europe s demands ostensibly aimed at ensuring that Greece can service its foreign debt are petulant, naive, and fundamentally self destructive. In rejecting them, the Greeks are not playing games they are trying to stay alive.

In the Greek German confrontation, it is easy, at least in theory, to design such a positive sum game. All we must do is ignore political rhetoric and focus on the economic outcomes that the protagonists really want.