Written by Tendenzias

Only the strongest will survive

Prisoner’s Dilemma is a fundamental problem in game theory and negotiation processes. It ‘was developed by the famous mathematician John Forbes Nash Jr United States, who received the Nobel Prize for Economics in 1994. Nash is based on two players choose to betray the other, but both would get a better result from the collaboration. Nash began to develop his theory by Antoine Augustin Cournot and his work on oligopolies. In this model increases the number of companies competing for the same market can choose how much to produce goods and to try to maximize his profit from the production of others. Relatively speaking, this is what is happening in the Spanish financial market. Leadership and the last in the standings are not determined and it depends on what you do each, but also the movements of others. Twenty players move on the board (about five banks and 15 boxes of old) and it is possible there are more than ten years after the implementation of financial reform promoted by Luis de Guindos, Minister of Economy. The purpose of the new legislation (as well as the two previous failed) is to promote lending, strengthen the solvency through mergers and restore international credibility of the Spanish system. In anticipation of changes in financial market does not trust anyone, but I am aware that the market share is a very important factor for the future because the margins are getting smaller. We’ll also assume that it is a historic opportunity to grow not happen again for decades, so they can not pass without trying to put the well and pull competitors. From here the prisoner’s dilemma. If any cooperating with each other, facilitating mergers or the sale of acquired entities, the future might be better for the parties concerned and worse for the opposition, but in principle, weaker players are not willing to surrender. At least unconditionally. The directors of entities placed worse than losing your job, what always unpleasant. In a year and a half, the boxes have gone 45-15 and managers who have survived this process should not leave their seats. The Ministry of Economy and the Bank of Spain will play the subtle work of convincing the lazy, something that took Luis de Guindos. “He understands the industry and was director of the Bank BMN and not let the errors of the politics of merger as before. If you do not take the step, the minister led them,” says an experienced executive who asked to remain anonymous. Pampillón, director of economic analysis of the IE Business School, said: “Guindos seems less political ministers earlier, but still influence policy.” According to the minister, could be a dozen people with different dimensions, which could raise the specter of oligopoly. The fuse will promote integration and provisioning needs of capital. In principle, it said to plug the hole in the brick would require an outlay of 50,000 million people. However, applied to the fine print of the Royal Decree and thanks to the enormous possibilities of accounting entities do not put more than about 25 billion of new capital, according to preliminary calculations.

Source: http://economia.elpais.com

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