CRISIS IN THE EURO AREA: COOPETITIVE GAME SOLUTIONS AS NEW POLICY TOOLS

  • David CARFÌ DESMaS "V.Pareto" University of Messina, Italy
  • Daniele SCHILIRÒ DESMaS "V.Pareto" University of Messina, Italy

Abstract

The crisis within the euro area has become frequent during 2010. First was the Greek economy to face a default problem of its sovreign debt, in November it was Ireland who has been in a serious financial situation at the verge of collapse causing difficulties to the euro. In this contribution we focus on the Greek crisis and we suggest, through a model of competition based on game theory and conceived at a macro level, feasible solutions in a cooperative perspective for the divergent interests which drive the economic policies in Germany and Greece, with the aim of improving the position of Greece, Germany and the whole euro area, also making a contribution to expand the set of macroeconomic policy tools.


By means of our general analytical framework of competition, we show the strategies that could bring to feasible solutions in a cooperative perspective for Germany and Greece, where these feasible solutions aim at offering a win-win outcome for both countries, letting them to share the pie fairly within a growth path represented by a non-zero sum game. A remarkable analytical result of our work consists in the determination of the win-win solution by a new selection method on the transferable utility Pareto boundary of the competitive game.

References

1. Alesina, A.F., Ardagna, S. 2009. Large Changes in Fiscal Policy: Taxes versus Spending. NBER Working Papers 15438.
2. Abadi, C. 2010. Germany Debates Euro Instability Fault, Global Post, March 19.
3. Baglieri, D., Carfì, D., and Dagnino, G.B. 2010. Profiting from Asymmetric R&D Alliances: Coopetitive Games and Firms’ Strategies. Paper presented at the 4th Workshop on Coopetition Strategy “Coopetition and Innovation”, June 17-18, in Montpellier, France.
4. Blanchard, O., Dell’Ariccia, G., and Mauro, P.2010. Rethinking Macroeconomic Policy, IMF SPN Working Paper: 1-18, February.
5. Brandenburger, A.M., Nalebuff, B.J. 1995. The Right Game: Use Game Theory to Shape Strategy. Harvard Business Review, 64: 57-71, July-August.
6. Carfì, D. 2008. Optimal boundaries for decisions, Atti della Accademia Peloritana dei Pericolanti, classe di Scienze Fisiche Matematiche e Naturali, Vol. LXXXVI issue 1 pp. 1-12. ISSN 0365-0359. http://antonello.unime.it/atti/
7. Carfì, D. 2009. Complete study of linear infinite games, Proceedings of the International Geometry Center - International Conference “Geometry in Odessa 2009”, Odessa, 25 - 30 May 2009 - ISSN 2072-9812. http://proceedings.d-omega.org/
8. Carfì, D. 2009. Payoff space in C1-games, Applied Sciences, 11: 1-16. http://www.mathem.pub.ro/apps/.
9. Carfì, D. 2009. Globalization and Differentiable General Sum Games, Proceedings of 3rd International Symposium Globalization and convergence in economic thought, Faculty of Economics - Communication and Economic Doctrines Department - The Bucharest Academy of Economic Studies - Bucharest 11 - 12 December 2009 - Proceeding in extensor.
10. Carfì, D. 2009. Differentiable game complete analysis for tourism firm decisions, Proceedings of THE 2009 INTERNATIONAL CONFERENCE ON TOURISM and WORKSHOP on Sustainable tourism within High Risk areas of environmental crisis, Messina, 22 - 25 aprile 2009
11. Carfì, D. 2010. A Model for Coopetitive Games. Paper presented at Sing6, July 6-9, in Palermo, Italy.
12. Carfì, D., Ricciardello, A. 2010. An Algorithm for Payoff Space in C1-Games, Atti della Accademia Peloritana dei Pericolanti, Classe di Scienze Fisiche Matematiche e Naturali, LXXXVIII (1): 1-19. http://antonello.unime.it/atti/.
13. Clarke-Hill, C., Huaning Li, and Davies, B. 2003. The Paradox of Co-operation and Competition in Startegic Alliances: Towards a Multi-Paradigm Approach, Management Research News, 26 (1):1-20.
14. Danninger, S., Joutz F. 2007. What Explains Germany’s Rebounding Export Market Share?. IMF Working Paper, Washington D.C., WP/07/24.
15. European Central Bank. 2010. Monthly Bulletin, Frankfurt, May.
16. Eurostat. 2010. News Release, Euro Indicators: 1-10, April.
17. Giavazzi, F., Pagano, M. 1990. Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries, in NBER Macroeconomic Annual, edited by O.J. Blanchard, S.Fisher, MIT Press, Cambridge, MA: 75-122.
18. Gulati, R., Nohria, N., and Zaheer, A. 2000. Strategic Networks. Strategic Management Journal, 21: 203-215.
19. Hellwig, M., Neumann, M.J.M. 1987. Economic Policy in Germany: Was there a Turnround. Economic Policy, 5:105-140, October.
20. Henning, R.C. 2006. The Exchange Rate Weapon and Macroeconomic Conflict, in International Monetary Power, edited by D.M. Andrews. Ithaca: Cornell University Press: 177-138.
21. Kirkegaard, J.F. 2010. In Defense of Europe’s Grand Bargain. Policy Brief 10-14. Washington D.C.: Peterson Institute for International Economics, June.
http://www.iie.com/publications/interstitial.cfm?ResearchID=1595.
22. Klodt, H., Lehment, H. eds. 2009. The Crisis and Beyond. Kiel: Kiel Institute for the World Economy, November.
23. Mussa, M. 2010. Beware of Greeks Bearing Debts, PIIE Working Paper: Washington D.C.: Peterson Institute for International Economics, May 17
http://www.iie.com/publications/papers/mussa201005.pdf.
24. Padula, G., Dagnino, G.B. 2007. Untangling the Rise of Coopetition, International Studies of Management and Organization, 37(2): 32-53.
25. Pisani-Ferry, J., Posen, A.S. (eds). 2009. The Euro at Ten: The Next Global Currency?. Washington D.C.: Peterson Institute for International Economics, Bruegel.
26. Porter, M. 1985. Competitive Advantage. Creating and Sustaining Superior Performance. New York: Free Press.
27. Posen, A.S. 2010. Having a Large Euro Area Is an Advantage for Germany. Die Welt, February 19. http://www.iie.com/research/researcharea.cfm?ResearchTopicID=53.
28. Quadrio, C.A.2010. The Greek Crisis and the European Crisis. How To Face Them. Economia Politica, (1): 3-8.
29. Schilirò, D. 2009. Knowledge, Learning, Networks and Performance of Firms in Knowledge-Based Economies, in New Technologies, Networks and Governance Structures, edited by A. Prinz, A. Steenge, N. Isegrei,, Wirtschaft: Forschung und Wissenschaft Bd. 24. Berlin: LIT-Verlag: 5-30.
30. Schilirò, D. 2010a, Pisani-Ferry, J., and Posen. A.S. 2009. The Euro at Ten: The next global currency? Washington D.C.: Peterson Institute for International Economics, Bruegel, Review of International Organizations, 5(1): 101-105.
31. Schilirò, D. 2010b. Investing in Knowledge: Knowledge, Human Capital and Institutions for the Long Run Growth, in Governance Of Innovation, edited by M.J. Arentsen, W. van Rossum, A.E. Steenge. Cheltenham: Edward Elgar: 33-50.
32. Stiles, J. 2001. Strategic Alliances. In Rethinking Strategy, edited by H. W. Volberda,T. Elfring. London: Sage Publications.
33. Von Hagen, J., Strauch, R. 2001. Fiscal Consolidations. Quality, Economic Conditions and Success. Public Choice, 109 (3-4): 327-346.
Published
2011-06-30
How to Cite
CARFÌ, David; SCHILIRÒ, Daniele. CRISIS IN THE EURO AREA: COOPETITIVE GAME SOLUTIONS AS NEW POLICY TOOLS. Theoretical and Practical Research in Economic Fields, [S.l.], v. 2, n. 1, p. 22-36, june 2011. ISSN 2068-7710. Available at: <https://journals.aserspublishing.eu/tpref/article/view/1109>. Date accessed: 24 feb. 2024.