Economics and finance suffered two tragedies recently: the death of the Nobel laureate John Nash and his wife in a horrible car accident, and more delays from Greece and its creditors in reaching an agreement on a path out of the costly and protracted crisis.
A mutually beneficial outcome would alleviate the long suffering of Greek citizens who have been devastated by unemployment, shrinking incomes and spreading poverty. It would also bolster the credibility, integrity and robustness of the euro zone as a viable economic, financial and political entity. And it would remove one of the uncertainties preventing the global economy from achieving a pace of growth consistent with its potential.
At first sight there seem to be little to link the two tragedies. Yet the game theory insights that John Nash pioneered — including the concept of a "cooperative game" — shed important light on what is happening in Greece, and help explain why the drama is unlikely to have a happy ending anytime soon.