Calling May's Bluff

The Credibility of the No-Deal Threat

The following is basically how Theresa May has presented her Brexit deals to Parliament:

MAY: "Hey everyone, I got this deal from Brussels -- it's the best deal I could find. They're not going to give us anything better. We have to take it otherwise No-Deal is going to happen, and that'd be a disaster. So if you don't want no-deal, vote for my deal!"

And this is how the MPs have responded:

MPs: "Bullsh*t. No one's gonna let a No-Deal Brexit happen. Your deal sucks and we're gonna get a better one. I don't believe you when you say it's your deal or No-Deal.."

And that's why May keeps getting rejected in historic fashion. See, May's leverage lies in her threat that it's going to be her deal or No-Deal. However, no MP really takes this No-Deal threat seriously. A No-Deal would be way too devastating for both the UK and the EU, and it would just be inconceivable to allow that to happen. Besides, Parliament figures that they can always ask for an extension and negotiate for a better deal, and that Brussels would 100% rather allow an extension rather than accept a devastating No-Deal. That's why they can vote down May with such confidence, without fear of her threat of a No-Deal.

In game theoretical terms, the House of Commons has basically called May out on her "non-credible threat" -- the non-credible threat here being No-Deal. Precisely, "a non-credible threat is a term used in game theory and economics to describe a threat in a sequential game that a rational player would actually not carry out, because it would not be in his or her best interest to do so."

This week's overwhelming vote against May's deal, the vote to not accept a No-Deal, and the subsequent extension is all proof of this. The MPs have called May's bluff.

But the situation may change. Parliament has voted for an extension, and everybody just assumes that the extension will just happen. However, an extension must be also unanimously agreed upon by all 27 EU Member states, and that is far from a guarantee. Look to prime Euroskeptic suspects Italy, Hungary, and/or Poland to possibly veto. It's a nonzero probability that everyone seems to be ignoring (except Nigel Farage, who is actually lobbying the aforementioned states to veto the extension).

So we see that the "non-credible threat" of No-Deal actually just got a little more credible. If so -- if No-Deal actually becomes a real possibility, whether through a EU member state's veto of the extension or through the efforts of hardcore British Euroskeptics like Farage, then we may have on our hands a fatal miscalculation by the House of Commons. May's threat may be really than it seems, and Britain may pay a price for treating her with such nonchalance.