Game Theory

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Introduction

Global economic recession of 2008 - 09 has led many countries towards debt problems and economic crisis. The members of European Union (EU) also faced economic recession and real debt problems in this recession. In the recent past, member states of EU have exhibited excellent strategic considerations for adoption of different rules and policies against the recent crisis and debt problem that have severely affected the EU (McLean and Taehee, 2010). This report explores the strategic interaction of members of the EU and commission in the process of implementing directives in these states because the implementation of directives has become significant concern in compliance discussion regarding the economic crisis in EU. According to Thomson (2009), directives refer to the important binding rules or enforceable legislative means proposed by the commission. The member countries of EU adopt the policies and legislations by compromised solutions after going through long and concentrated negotiations on the proposed legislations; the states have obligations to transpose the legislations and policies in their respective domestic laws.

The first section of the report entails the relevance of the compliance from the perspective of strategic interaction among the member states of EU. It will also describe the main actors along with the scenario. After that the solution concepts are selected in order to acquire a prediction about the possible behavior of the players and outcomes of their actions. These results will be obtained through implementation of the equilibrium concepts like game theory selected for the current strategic framework and predictions will be made. Last section presents the discussion on the importance of results obtained through the implementation of the concept solutions.

Relevance from Strategic Perspective

As stated by the Thomson (2009), the most significant and enforceable resources are directives of the commission that are anticipated by the commission and the members states of the EU adopt these directives by conciliation clarification. These directives are adopted after the concentrated consultation with the commitment to transpose these directives into domestic regulations (Carrubba, 2005). Although the member states of the EU have agreed on the outcomes and the institutional regulations for implementation of these directives including the enforcement capability of the commission to issue a contravention schedule against a non- complying member state in the European Court of Justice (McLean and Taehee, 2010). The member states may still have motivations to pursue their interests in the process of implementation of directives at the cost of cooperation clarification. The natural and typical difficulty in the way of the implementation process produces a composite strategic compliance game (Koing and Brooke, 2009). This difficulty is common for the monitoring actor and a group of cooperating actor’s circumstances. In the strategic compliance game, the member states attempt to anticipate the capability and enthusiasm of the commission to support non- compliance. As described by Chayes and Chayes (1993), the intellectual discussion about the rationale of non- compliance was influenced by two traditional schools of thought and this discussion focused on the limitations of country specific capacity from the administration. The discussion also includes that the enforcement school of thought gave significant position to the purposive actors (Zhelyazkova and Rene, 2009). The experimental proposition of these factors was independently considered when the intellectuals either estimated the transposition behavior of the member state or enforcement activities by commission. More recently, as explained by Kelly (2003), the impact of the aspects associated to the prior negotiation period is significant for the transposition and the enforcement phase of directives.

Compliance of the member states...
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