Sequential Bargaining with Incomplete Information

Drew Fudenberg; Jean Tirole

doi:10.2307/2297414

Nuclear Deterrence and the Strategy of Limited Retaliation

American Political Science Review ◽

10.2307/1962402 ◽

1989 ◽

Vol 83 (2) ◽

pp. 503-519 ◽

Cited By ~ 29

Author(s):

Robert Powell

Keyword(s):

Incomplete Information ◽

Formal Analysis ◽

Nuclear Deterrence ◽

Deterrence Theory ◽

Sequential Bargaining ◽

Nuclear Exchange ◽

Coercive Pressure

Recent formal work in nuclear deterrence theory has focused on brinkmanship crises in which states exert coercive pressure by manipulating the risk of an unlimited nuclear exchange. This essay extends the formal analysis of deterrence theory to the strategy of limited retaliation in which states exert coercive pressure by inflicting limited amounts of damage in order to make the threat of future punishment more credible. This strategy is modeled as a game of sequential bargaining with incomplete information. The equilibria suggest that states prefer relatively smaller, less-destructive limited options; that counterforce options are desirable even if they cannot limit the total amount of damage an adversary can inflict; that smaller, less-destructive limited nuclear options may make a nuclear exchange more likely; and that uncertainty and incomplete information may significantly enhance deterrence.

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Nuclear Brinkmanship with Two-Sided Incomplete Information

American Political Science Review ◽

10.2307/1958063 ◽

1988 ◽

Vol 82 (1) ◽

pp. 155-178 ◽

Cited By ~ 53

Author(s):

Robert Powell

Keyword(s):

Incomplete Information ◽

Conflict Of Interest ◽

Conflicts Of Interest ◽

Status Quo ◽

The State ◽

Expected Payoff ◽

Sequential Bargaining ◽

The Status

A brinkmanship crisis with two-sided incomplete information is modeled as a game of sequential bargaining in which each state is uncertain of its adversary's resolve. The sequential crisis equilibria are characterized explicitly and used to analyze the influences of resolve, misperception, and the status quo on escalation and crisis stability. The description of brinkmanship as a contest of resolve is found to be misleading: the state with the greatest resolve may not prevail in the crisis; a state may be less, not more, likely to prevail the greater its resolve; and a states' expected payoff may be less, not more, the greater its resolve. Moreover, reducing misperception may destabilize a crisis. Surprisingly, increasing the stake a potential challenger has in the status quo may not make a challenge less likely. Finally, crises involving severe conflicts of interest are shown to be less likely than crises not entailing a severe conflict of interest.

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Crisis Bargaining, Escalation, and MAD

American Political Science Review ◽

10.2307/1962673 ◽

1987 ◽

Vol 81 (3) ◽

pp. 717-735 ◽

Cited By ~ 77

Author(s):

Robert Powell

Keyword(s):

Incomplete Information ◽

Essential Feature ◽

The State ◽

Crisis Bargaining ◽

Sequential Bargaining ◽

Game Theoretic ◽

Theoretic Foundations

Although incomplete information is recognized to be an essential feature of crises, game-theoretic formulations have not generally modeled this explicitly. This paper models a mutually assured destruction (MAD) crisis as a game of sequential bargaining with incomplete information, sufficiently simple that its equibria may be found. These provide better game-theoretic foundations for the notions of resolve and critical risk and their role in crises and also make it possible to compare the bargaining dynamics of this model with those of descriptively richer, but incompletely specified models, revealing several inconsistencies: several analyses of MAD conclude that the state with the greatest resolve in this contest of resolve will prevail. Many models based on critical risks suggest that a state is less likely to escalate, the greater its adversary's resolve. In our model, however, the state with the weakest resolve sometimes prevails, and some states prove more likely to escalate if their adversaries' resolve is greater.

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