Sunday, July 22, 2012

"Floodgates Open As Four More Spanish Regions Seek Bailout; German Nürburgring Faces Bankruptcy"

I'm not sure why but we've been seeing more stories* that contain aspects of or references to game theory. For an idea that's going on 90 years old it sure is hanging in there.
From ZeroHedge:
Even as Europe has become an utterly dysfunctional experiment in everything relating to modern economics and monetary theory, it has one redeeming feature: it has proven that the Defection regime under Game Theory is 100% correct. It says that once the defections from an unstable Nash equilibrium begin, there is no stopping until the entire system collapses under its own weight.

This is precisely what has happened in Spain, where first Catalunya, then Valencia on Friday, and now virtually everyone else is set to demand a bailout. From Bloomberg: The Balearic Islands and Catalonia are among six Spanish regions that may ask for aid from the central government after Valencia sought a bailout, El Pais reported. Castilla-La-Mancha, Murcia, the Canary Islands and possibly Andalusia are also having difficulty funding themselves and some of these regions are studying plans to tap the recently created emergency-loan fund that Valencia said it would use yesterday, the newspaper said, without citing anyone."
"Spain created the 18 billion-euro ($23 billion) bailout mechanism last week to help cash-strapped regions even as its own access to financial markets narrows." What Spain's perfectly insolvent and highly corrupt regions also know is that the bailout money, like in the case of the ESM, will be sufficient for one, perhaps two, of the applicants. The rest will be out of luck....MORE
To Hell With Human Cooperation and Trust: There are Indeed Ultimatum Strategies to Win an Iterated Prisoners Dilemma

Prisoner's Dilemma in Action: "Deutsche Bank gets prosecution witness status in LIBOR Probe"