The simplified outcomes are either EU bails Greece out or Greece threatens the stability of the EU by defaulting on their debt.
Greece’s and the EU’s payoffs seem to be all or nothing. If that is the case than there seems to be a coordination problem and of course an Ultimatum game. There is clearly a power imbalance.
“It’s a madman’s game theory,” said Stavros Zenios, an economist and member of the board at the central bank of Cyprus. “Don’t press us too much or we will jump off a cliff and take everyone with us.””
As Mr. Varoufakis, a trained economist, has written, “it may be rational to act irrationally.” I interpreted Mr. Varoufakis’ statement to mean that Greece actually does have power and influence over the EU so why should Greece succumb to EU demands? (Aside from threatening the stability of the Eurozone)