Brexit, Chicken and Ulysses Pacts: the negotiating theory behind the UK-EU stalemate

Ever since Thomas Schelling — an advisor on Dr Strangelove! — published his work on negotiating theory and nuclear deterrence, we've developed a rich vocabulary for describing negotiating tactics and their underlying theories.

Negotiators get some benefit from demonstrating that they're willing to endure some self-harm; that's the theory underpinning "Mutually Assured Destruction," the idea that America would be willing to reduce its population and those of its allies to radioactive ash in order to punish the USSR for launching a first nuclear strike.

One way to do this is with "Ulysses Pacts" (previously), through which parties take courses of action off the table before sitting down at the bargaining table. A union leader might promise to resign rather than give away the pension — it doesn't matter how much the bosses say that the pensions have to go, the negotiator simply can't agree; at best, they can quit and the negotiations can stall until someone else is nominated. In the realm of free/open source software, developers begin by issuing an irrevocable copyright license to their code that makes it free. No matter what pressure is put on them by their investors or bosses or acquisition suitors, they can't do anything about it: the license is permanent and there's no backsies.

In a game of chicken, one driver might detach their steering wheel and throw it out the window. At that point, the other driver will almost certainly swerve and lose the game, because there's literally no way the first driver can give up.

Tim Harford applies all of this to the current Brexit negotiations, in which the Theresa May regime has declared several items to be non-negotiable, staking her political career on them (blocking people from entering the UK for example); and EU negotiators have done the same (no access to the EU's common market unless the borders are open to EU citizens).

The problem, writes Harford, is that May isn't just trying to deter the EU from taking a course of action: she's trying to compel them to take a position favorable to the UK. Compellence has a different set of theories, and throwing away your steering wheel doesn't work in compellence situations.

It's easy to see why both sides are behaving like this — it's the logic of Chicken. But the eventual result may be something no sane person wants: a car crash. In May's recent speech, she set out her willingness to risk such a crash by saying she might walk away without a deal. That does make some sense: it's how you act if you want to win a game of Chicken. But there are games of Chicken that nobody wins.

That leads to a second insight from Schelling: the difference between deterrence and what he called "compellence". Deterrence dissuades action, but compellence means persuading or threatening someone so that they do act. In his 1984 book Choice and Consequence (US) Schelling pointed out that deterrence is easier. A deterred person does nothing, so need not admit that the deterrence worked, but a compelled person must visibly acquiesce.

Unfortunately, the process specified under Article 50 leaves the UK in the awkward position of trying to achieve compellence. The default option is the car crash, a disorderly fracture with the EU. Anything else requires all 28 countries involved to take prompt constructive action. May and her chancellor Philip Hammond have made some (faintly) threatening noises about how the EU should play along, but such threats can only work if they compel an energetic and active response. That's far from certain — compellence is hard.

Brexit as a game of Chicken
[Tim Harford]