ARTICLE

Game Theory as an Instrument

for the
Analysis of International Relations
Hector Correa

1. Introduction
I nter nati onal r el ati ons, as char acter i zed, among other author s, by Evans and
Newnham (1998, pp. 274n), Lake and Powel l (1999, pp. 3n), Reynol ds (1994, pp. 15n) and
Wol fers (1991, pp. 31n) deal s wi th the i nteracti ons among speci fi c actors whi ch i ncl ude
nati on-states, i nternati onal organi zati ons, and mul ti nati onal corporati ons.
From thi s i t fol l ows that game theory, whose objecti ve i s the formal i zed anal ysi s of
rel ati onshi ps among two or more actors, can assi st i nternati onal rel ati ons theoreti ci ans i n
expl ai ni ng the i nteracti ons among the actors i t consi ders, and practi ti oners i n the fi el d to
i nfl uence those i nter acti ons to benefi t the actor s they r epr esent or , hopeful l y, al l
humanki nd.
I n fact, as el oquentl y shown by Poundstone (1992), game theor y and i nter nati onal
rel ati ons have i nfl uenced each other al most si nce the publ i cati on of The Theory of Games
and Economi c Behavi or by von Neumann and Morgenstern (1944), usual l y consi dered to be
the fi r st systemati c and extensi ve for mal anal ysi s of soci al i nter acti ons. Bennett and
Ni chol son (1994, p. 209) i ndi cate that thi s i nter acti on has been both fr i endl y and
confl i cti ve, and consi dered by some to be constructi ve and by others destructi ve.
The object of thi s paper i s to demonstr ate the possi bi l i ti es and l i mi tati ons of game
theory as an i nstrument for the study of i nternati onal rel ati ons. The approach to be used
descri bes el ementary game theoreti c model s as an i ntegral part of i nternati onal rel ati ons,
r ather than as a col l ecti on of exampl es of the mathemati cs of game theor y. A si mi l ar
approach, but at a hi gher l evel of sophi sti cati on and wi th a more l i mi ted coverage, i s used
by Powel l (1999).
187 1

Hector Correa i s vi si ti ng professor Col l ege of I nternati onal Rel ati ons Ri tsumai kan Uni versi ty,
Kyoto, Japan: pr ofessor gr aduate school of Publ i c and I nter nati onal Affai r s Uni ver si ty of
Pi ttsbur gh U.S.A. and Resour ce Pr ofessor Gr owth Dynami cs Uni ver si ty I nsti tute Er asmus
Uni versi ty Rotterdam - The Netherl ands
As a bas i s for th e an al y s i s , a s y s temati zati on of th e mai n i s s u es s tu di ed i n
i nter nati onal r el ati ons i s pr esented i n Secti on 2. I n Secti on 3, each of these i ssues i s
anal yzed from a game theoreti c poi nt of vi ew. No attempt i s made to revi ew al l or the most
advanced rel evant publ i cati ons. Attenti on i s focused on el ementary games, whi ch are used
to i l l umi nate the core el ements of the i nteracti ons among nati on-states and to i l l ustrate
the ways those i nteracti ons are l i kel y to proceed.
Reference i s made i n the mai n text of thi s paper to some of the numerous l i terature
revi ews avai l abl e of appl i cati ons of game theory to the anal ysi s of i nternati onal rel ati ons.
I n general , these presentati ons have a more restri cted focus than that of thi s paper, and
they emphasi ze the poi nt of vi ew of game theor y r ather than that of i nter nati onal
rel ati ons.
Thi s paper i s addressed to theoreti ci ans and practi ti oners of i nternati onal rel ati ons
not par ti cul ar l y ver sed i n game theor y, r ather than to those who ar e fl uent i n i ts
mathemati cal l anguage and i ntr i caci es. For thi s r eason i t i s appr opr i ate to menti on
O'Nei l 's (1994, pp. 9) paper, appropri atel y cal l ed "Sources of Game Theory for i nternati onal
rel ati ons Speci al i sts". I t revi ews a substanti al number of publ i cati ons and cl assi fi es them
by thei r l evel of mathemati cal sophi sti cati on. Thi s paper can be compl emented wi th the
fol l owi ng more recent textbooks: Bi erman and Fernandez (1998), Di xi t and Skeath (1999),
Gar dner (1995), Gi nti s (2000), Mor r ow (1994), Str affi n (1993) and Tayl or (1995). Al l of
these pr esent the subject at an i nter medi ate mathemati cal l evel at most, and i ncl ude
rel evant appl i cati ons to i nternati onal rel ati ons i ssues.
Secti on 3 ends wi th the el ementar y for mal i zati on of the I sr ael i -Pal esti ni an confl i ct
presented i n Secti on 3.5. Fi nal l y, Secti on 4 i ncl udes a cri ti cal eval uati on of the possi bi l i ti es
and l i mi tati ons of game theory as an i nstrument for the study of i nternati onal rel ati ons
i ssues.
2. Observations on the content and scope of international relations
As was menti oned above, the obj ect of the study of i nter nati onal r el ati ons (as
r estr i cted for the pur poses of thi s paper ) i s the anal ysi s of i nter acti ons among nati on-
states. These i nteracti ons i nvol ve i nterdependent goal -di rected acti vi ti es. I nterdependency
means that the achi evement of the goal s of any nati on-state does not depend onl y upon i ts
own acti ons, but al so upon those of the other nati on-states.
Lake and Powel l (1994, pp 3n) emphasi ze that the subject matter of i nter nati onal
rel ati ons i s si mpl y the study of the i nteracti ons themsel ves, rather than of the i ssues that
consti tute thei r substance and thei r parti cul ar form. I f thi s poi nt of vi ew i s adopted, the
subj ect matter of i nter nati onal r el ati ons and game theor y pr acti cal l y coi nci de, and
i nternati onal rel ati ons runs the ri sk of becomi ng an appl i ed branch of game theory just as
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mi cr oeconomi c theor y has someti mes been sai d to be an appl i ed br anch of cal cul us. To
avoi d thi s, the speci al characteri sti cs of i nternati onal actors, thei r i nteracti ons, the i ssues
negoti ated i n them, and the par ti cul ar for m of the i nter acti ons themsel ves must be
emphasi zed.
Some i nternati onal actors are menti oned i n Secti on 1. Evans and Newnham (1998, pp.
4n) l i st several more. The presentati on bel ow i s restri cted to the anal ysi s of i nteracti ons
among nati on-states.
Di sti ncti ve characteri sti cs of the i nternati onal rel ati ons approach to the anal ysi s of
i nteracti ons among nati on-states i ncl ude the attenti on gi ven to thei r moti vati on and the
power they use to i nfl uence each other. The rather l i mi ted contri buti on that game theory
can make to thi s topi c i s di scussed i n Secti on 3.1.
Str ange (1991, pp. 4n) emphasi zes that secur i ty and economi cs ar e the two mai n
i ssues consi dered i n the theory and practi ce of i nternati onal rel ati ons. Other i mportant
i ssues i ncl ude educati on, envi ronment, human ri ghts and i nternati onal l aw. Despi te thei r
rel evance, the other i ssues menti oned above are not consi dered i n thi s paper. Thei r game
theoreti c anal yses are onl y possi bi l i ti es for future research. Attenti on i s restri cted here to
the i nteracti ons consi dered i n most appl i cati ons of game theory to i nternati onal rel ati ons
topi cs, that i s, those ori gi nati ng i n defense and economi c i ssues. The anal ysi s i s presented
i n Secti ons 3.2 and 3.3.
A separate di mensi on of the study of i nternati onal rel ati ons i s based on the fact that
the i nteracti ons that consti tute them general l y proceed al ong wel l -defi ned l i nes not usual l y
encountered i n i nteracti ons among i ndi vi dual s, pri vate i nsti tuti ons and di fferent l evel s of
gover nment wi thi n nati on-states. Speci fi cal l y, di pl omacy i s the r egul ar channel for
i nternati onal rel ati ons, and does not have an equi val ent counterpart i n the i nteracti ons
wi thi n nati on-states. Some observati ons about game theoreti c anal ysi s of di pl omacy are
presented i n Secti on 3.4.
3. Game theoretic analyses of international relations topics
3.1. Game theory and the motivation and power of the actors in international
relations
Accordi ng to, say, Evans and Newnham (1998, pp. 645n) and Hol l i s and Smi th (1990,
pp. 10n), one of the basi c assumpti ons of the real i st approach to i nternati onal rel ati ons i s
that nati on-states ar e moti vated onl y by thei r own i nter ests. Thi s school of thought
emphasi zes that nati on-states consi der the needs and i nterests of other nati on-states onl y
when the other nati on-states have the capabi l i ty to enforce thei r demands by threateni ng
or performi ng damagi ng acti ons. Thi s means that nati on-states are not gui ded by ethi cal or
humani tar i an consi der ati ons, and that i nter nati onal l aw and even tr eati es and si mi l ar
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189 3
formal i zed agreements do not real l y restri ct the i nternati onal acti vi ti es of nati on-states.
I t i s parti cul arl y i nteresti ng to consi der these observati ons from the poi nt of vi ew of
Game Theory. A basi c and much cri ti ci zed assumpti on of thi s di sci pl i ne when appl i ed to
soci al i nteracti ons i s that the actors i nvol ved are compl etel y sel f-centered and ti rel essl y
pursui ng onl y thei r own sati sfacti on. Game Theory fi nds i n the nati on-states as descri bed
above the cl osest real -l i fe exampl es of i ts abstract constructs. Thi s i s the true regardl ess of
whether they are i nteracti ng wi th respect to securi ty or to economi c i ssues.
The observati ons above i ndi cati ng that nati on-states take i nto consi derati on the needs
and i nterests of other nati on-states onl y when these other nati on-states are abl e, i .e., have
the power, to threaten or perform damagi ng acti ons, shows that the determi nants of the
power of the di ffer ent nati on-states must be one of the mai n concer ns of the theor y of
i nternati onal rel ati ons.
Contrary to thi s, and despi te the substanti al agreement between the theori es of games
and of i nternati onal rel ati ons wi th respect to the moti vati ons of thei r actors, game theory
pays l i ttl e or no attenti on to the determi nants of the acti ons avai l abl e to the pl ayers. I t i s
si mpl y assumed that these acti ons are known and that the pl ayers can choose any one of
them, gui ded onl y by thei r preferences, and wi thout any restri cti on. The determi nants of
the acti ons avai l abl e to the pl ayers are not studi ed i n Game Theory. More expl i ci tl y, the
determi nants of power, one of the most i mportant factors i nfl uenci ng the acti ons avai l abl e
to nati on-states i n the theory of i nternati onal rel ati ons, recei ves l i ttl e or no attenti on i n
Game Theor y. Thi s means that, i n i ts pr esent condi ti on, thi s di sci pl i ne i s unabl e to
contri bute to al l the areas of i nterest to theoreti ci ans and practi ti oners of i nternati onal
rel ati ons.
3.2. Game theory and security and defense studies
3.2.1. Introduction
Extendi ng the obser vati on i n Secti on 1 about the cr oss-fer ti l i zati on between Game
Theor y and i nter nati onal r el ati ons that began taki ng pl ace after the publ i cati on of von
Neumann's and Mor genster n's (1944) pi oneer i ng book, i t can be sai d that thi s cr oss
ferti l i zati on was centered on securi ty and defense probl ems. Part of the reason i s that the
most appl i cabl e component of the von Neumann and Morgenstern contri buti on deal s wi th
head-on confl i cts, a topi c that was of great practi cal i nterest duri ng the Col d War. These 2
ci r cu ms tan ces h av e s u bs i ded s i n ce th at ti me. Ex ter n al pr es s u r es an d i n ter n al
decomposi ti on have repl aced the USSR threat wi th the smal l er threat of Russi a, and the
contr i buti ons of Nash, Har sanyi and Sel ten and the i nsi ghts of Maynar d-Smi th have
enl arged Game Theory far beyond the area covered by von Neumann and Morgenstern.
Despi te thi s, most avai l abl e appl i cati ons of Game Theory to i nternati onal rel ati ons are sti l l
restri cted to the anal ysi s of the i nteracti ons among nati on-states based on securi ty and
defense i ssues.
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For the systemati c anal ysi s of these topi cs, i t i s useful to subdi vi de the formal studi es
of securi ty and defense i nto the fol l owi ng cl asses:
1. Defense al l i ances,
2. Deterrence and arms races,
3. Cri ses that may l ead to war,
4. War and peace, and
5. Battl es i n a war
Each of these i ssues i s anal yzed bel ow.
3.2.2. Defense alliances
Gardner (1995, pp. 401, 404) presents 2 bri ef anal yses of the formati on of i nternati onal
al l i ances. The fi rst i s l i mi ted to a study of how defense costs shoul d be di stri buted among 3
nati on-states i nterested i n defendi ng themsel ves from a common external threat. The onl y
basi s for thi s di str i buti on i s the l ength of the boundar i es of the nati on-states i n di r ect
contact wi th the enemy's terri tori es. I t i s i mpl i ci tl y assumed that the nati on-states wi l l
benefi t equal l y fr om the pr otecti on pr ovi ded by the al l i ance, and the capabi l i ti es of the
nati on-states to contr i bute the r esour ces needed for thei r col l ecti ve defense ar e not
consi der ed. I n the second anal ysi s, the author studi es the condi ti ons that pr evai l ed i n
Bosni a around 1993, and shows that no al l i ance of any 2 of the 3 warri ng facti ons (Serbs,
Cr oats and Musl i ns) coul d have l ead to a sustai nabl e peace. The conti nuous need for
forei gn armi es i n the area confi rm Gardner's theoreti cal concl usi ons.
Powel l (1999, pp. 149-196) makes an extensi ve and systemati c study of al l i ances by
appl yi ng game theoreti c techni ques. He anal yzes the i nteracti ons of 3 nati on-states, 2 of
them i nvol ved i n a di rect confrontati on that coul d l ead to war, and a thi rd that must deci de
whether to take one si de or the other. The concl usi ons reached provi de suggesti ons on the
paths that the nati on-states shoul d fol l ow and the possi bl e war/peace consequences that
di fferent deci si ons woul d have.
Numerous addi ti onal topi cs rel ated to al l i ances among nati on-states can be anal yzed
usi ng tool s of cooperati ve game theory. For i nstance, Brams, Doherty and Wei der (1994,
pp. 95n) and Tayl or (1995, pp. 45n, 71n) present a method for constructi ng an i ndex of the
power of each member of an al l i ance to i nfl uence the al l i ance's affai rs, and appl y i t to the
European Uni on. I t i s al so possi bl e to adapt the anal yses of i nternati onal cartel s such as
OPEC to study the wi l l i ngness of the members of an al l i ance to ful fi l l thei r obl i gati ons and
the benefi ts that non-members of an al l i ance can recei ve wi thout contri buti ng to i t. Thi s
l ast poi nt i s anal yzed, for i nstance, by Ni chol son (1989, pp. 116n). Al so usi ng cooperati ve
game theory, I ntri l i gator (1994, pp. 47n) presents a general di scussi on of the probl ems and
possi bi l i ti es of cooperati on among nati on-states, and appl i es i t to an anal ysi s of bi l ateral
and mul ti l ater al r el ati ons among Chi na, the Eur opean Communi ty, Japan, the Sovi et
Uni on and the U.S. Thi s author's concl usi ons di ffer from those that were an accepted poi nt
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of vi ew at the ti me when he made hi s anal ysi s.
3.2.3. Deterrence and arms races
Anal yses of deterrence and arms races are probabl y among the most studi ed topi cs i n
i nter nati onal r el ati ons i n gener al , and ar e al so among those most fr equentl y anal yzed
usi ng game theor eti c i nstr uments. Gl edi tsch (1990, pp. 1n) pr esents an i nsi ghtful
l i ter atur e r evi ew of the studi es avai l abl e, r egar dl ess of the i nstr uments used, and
I ntri l i gator and Bri to (1990, pp. 58n) summari ze the formal i zed anal yses, payi ng speci al
attenti on to studi es usi ng game theoreti c tool s. Bri ef updates deal i ng wi th thi s second type
of studi es ar e pr esented by Bol ks and Stol l (2000, pp 580n) and Reuveny and Maxwel l
(1998, pp. 771n). I n addi ti on, these l ast two studi es research aspects of the probl em not
previ ousl y i nvesti gated.
I n the si mpl est for mul ati ons avai l abl e, the case of 2 nati on-states i n a di r ect
confrontati on i s consi dered. As i ndi cated by Brams and Ki l gour (1988, p.18), these actors
use a pol i cy of deterrence when each of them threatens to retal i ate for a possi bl e offense of
the other as a means to pr event such an offense fr om occur r i ng i n the fi r st pl ace. I n
pr i nci pl e, an offense coul d i nvol ve der ogator y comments, damagi ng economi c pol i ci es,
armed attacks, etc. Most of the anal yses of deterrence refer to threats of usi ng force, and
onl y these cases are consi dered bel ow. Under these ci rcumstances, arms races are si mpl y
the sequences of events that take pl ace when the nati on-states i n a confrontati on want to
i ncrease the bel i evabi l i ty of thei r threats. The objecti ve of the two nati on-states i n a di rect
confrontati on i s to protect themsel ves agai nst the possi bi l i ty of destructi on or domi nati on
by the other. Ei ther of the nati on-states i nvol ved i s l i kel y to feel more secure i f i t acqui res
weapons, even i f thi s i s done pur el y fr om defensi ve r easons. On the other hand, si nce
weapons can be used as much for defense as for attack, the other nati on-state can never be
sure of the i ntenti ons of the fi rst. For thi s reason, i t feel s obl i ged to produce or purchase
weapons to prepare i tsel f to defend i ts i nterests. The fi nal resul t i s that the 2 nati on-states
i nvol ved adopt an ar mamenti st str ategy that benefi ts them l ess than the str ategy
acqui ri ng weapons.
Numerous authors, i ncl udi ng Brams (1975, p. 33), Cl emens (1998, p. 165), Di xi t and
Skeath (1999, pp. 108, 267), Hamburger (1979, p. 76), Powel l (1999, p. 8) and Tayl or (1995,
p. 31), formal i ze the presentati on above i n the wel l -known Pri soners' Di l emma game. Once
thi s i s done, the anal ysi s can be expanded i n several ways.
I t i s general l y accepted i n game theory that i n a confrontati on that takes pl ace onl y
once, the Pr i soner s' Di l emma pessi mi st outcome menti oned above cannot be avoi ded.
However, most confrontati ons between nati on-states i nvol ve a sequence of events. I n thi s
case, i t can be shown that even i n the si mpl i fi ed for mul ati on of the pr obl em pr esented
above i n whi ch each of the nati on-states i nvol ved has onl y 2 str ategi es, ther e i s a
possi bi l i ty that these actors may adopt a non- or l ess confrontati onal strategy. Thi s topi c i s
extensi vel y di scussed by Poundstone (1992) who i ndi cates that the l ogi c behi nd the
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Pri soners' Di l emma model and the model i tsel f had a substanti al i nfl uence on the USA's
deci si ons about the hydrogen bomb and i nterconti nental mi ssi l es.
A mi nor conceptual modi fi cati on of the arms race model i nvol ves the assumpti on that
the strategi es avai l abl e to the nati on-states speci fy the si ze of thei r defense budgets. An
el ementary exampl e of thi s i s presented by Hamburger (1979, p. 105). When i t i s assumed
that the si ze of defense budgets i s the i nstrument that each contendi ng nati on-state can
use to prevent an attack by the other, i t i s possi bl e to i ncl ude a characteri sti c of arms races
not consi dered i n the Pri soners' Di l emma model . Speci fi cal l y, the contendi ng nati on-states
do not si mpl y mai ntai n thei r mi l i tary capabi l i ti es at a fi xed l evel . I nstead, they tend to
i ncrease them as much as they can i n an effort to gai n the upper hand i n thei r contest.
Thi s escal ati on pr ocess can conti nue for as l ong as the r esour ces of the nati on-states
i nvol ved permi t, or unti l an enforceabl e agreement i s reached among them to l i mi t thei r
arms bui l dup. Lei ni nger (1990, pp. 388n) and O'Nei l l (1985, pp. 220n) i ndi cate that thi s
form of behavi or al so takes pl ace i n what i s cal l ed a Dol l ar Aucti on game. I n thi s game, 2
pl ayers bi d for a pri ze of 1 dol l ar. The hi ghest bi dder recei ves the pri ze but both pay thei r
bi ds. Each bi dder i ncr eases hi s/her bi ds to avoi d a compl ete l oss of the payments that
he/she has to make. I t can be mathemati cal l y shown, and has been exper i mental l y
obser ved, that bi ds hi gher than the expected pr i ze ar e possi bl e, and that bi ddi ng can
proceed up to the poi nt where fi nanci al capabi l i ti es i mpose a l i mi t.
Ri char dson's ar ms r aces model , pr esented, for i nstance, by Luenber ger (1979, pp.
206n) and Ol i ni ck (1978, 20n), studi es a more sophi sti cated and dynami c form of escal ati on
wi th what are consi dered to be non-game-theoreti c methods. The reason for thi s i s that
Ri chardson assumes that the nati on-state actors do not rati onal l y sel ect thei r strategi es
but rather that they automati cal l y respond to each other changes i n defense expendi tures.
A di fferent approach i s used by Powel l (1999, pp. 49n), who not onl y expl i ci tl y consi ders
r ati onal behavi or , but al so the choi ce of the nati on-states between expendi tur es on
consumpti on and growth on the one hand, and expendi tures on defense on the other.
3.2.4. International crises
I nter nati onal cr i ses, as descr i bed, for i nstance, by Evans and Newnham (1998, pp.
101n), can be characteri zed by the events that take pl ace when one or more nati on-states
percei ve that thei r securi ty i s suddenl y, i mmedi atel y and seri ousl y threatened by acti ons
pr oposed or per for med by other nati on-states or by events acci dental l y taki ng pl ace i n
them. No attempt wi l l be made here to anal yze i nternati onal cri ses due to uncontrol l abl e
events such as human or ani mal epi demi cs. These di ffer i n a basi c way from cri ses that are
due to threatened or performed acti ons, si nce cooperati on among the nati on-states affected
by uncontr ol l abl e events i s much mor e l i kel y than when nati on-states feel the need to
defend themsel ves from others.
From the observati ons above i t fol l ows that i nternati onal cri ses can be consi dered, at a
conceptual l evel , as sharpeni ng of arms races. I n both cases, each set of nati on-states i n a
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confrontati on feel s the need to defend i tsel f from acti ons of the other. However, i n a cri si s,
i n vi ew of the suddenness, i mmedi acy and magni tude of the threat, the threatened nati on-
states show thei r wi l l i ngness to use mai nl y mi l i tar y sancti ons to for ce the thr eateni ng
nati on-states to reverse acti ons al ready taken or desi st i n those pl anned. The observati ons
above suggest that there shoul d be a substanti al si mi l ari ty between the game theoreti c
anal ysi s of ar ms r aces and of i nter nati onal cr i ses. I t i s shown bel ow that, to a cer tai n
extent, thi s i s the case.
At the most el ementary l evel , i t can be assumed that each of the two nati on-states
i nvol ved i n a confrontati onal cri si s has two strategi es: confrontati on and cooperati on. Wi th
the fi rst strategy, the threateni ng nati on-state attempts to force the other to accommodate
to i ts wi shes, and the thr eatened nati on-state attempts to for ce the other to hal t i ts
demands. I t shoul d be cl ear that threateni ng words can escal ate to acti ons and fi nal l y to
war. Thi s suggests that a Pri soners' Di l emma game and i ts extensi ons can be used for a
si mpl i fi ed anal ysi s of a cri si s. However, i t wi l l be seen bel ow that, at l east i n some cases,
the game cal l ed Chi cken i s a better representati on of the phenomenon.
The Cuban Mi ssi l e Cr i si s i s pr obabl y the most fr equentl y used exampl e of a game
theor eti c anal ysi s of an i nter nati onal cr i si s. One r eason for thi s i s i ts r ather cl ear
defi ni ti on of the acti ons that the nati on-states i nvol ved wer e abl e to take, the possi bl e
outcomes of those acti ons, and the ti me peri od i n whi ch the whol e cri si s devel oped.
I n the most el ementary formul ati on, presented, for i nstance, by Brams (1975, pp. 41n
and 1990, pp. 105n), Cl emens (1998, p. 75) and Poundstone (1992, pp. 204n), i t i s assumed
that the strategi es open to the USA were to bl ockade Cuba to stop the i nstal l ati on of the
Sovi et mi ssi l es or to attack the exi sti ng and any possi bl e future faci l i ti es bui l t there. The
strategi es for the USSR were to wi thdraw the mi ssi l es al ready i nstal l ed or to mai ntai n
them and conti nue wi th thei r i nstal l ati on. I t i s i nteresti ng to observed that thi s game has
2 outcomes rather than the 1 found for the si mpl est arms race model . I n one of the them
the USA i s the vi ctor, whi l e the USSR wi ns i n the other. Thi s i s the characteri sti c of a
game of Chi cken. Extensi ons take i nto consi der ati on that the Cuban Mi ssi l e Cr i si s
devel oped i n fai r l y cl ear l y defi ned stages. I t began wi th the USSR's deci si on to pl ace
mi ssi l es i n Cuba, conti nued wi th the reacti ons of the USA and then the fi nal responses of
the USSR. Thi s sequence of events i s streaml i ned i n si mpl i fi ed model s proposed by Morrow
(1994, p. 51) and Straffi n (1993, pp. 39, 227). I t i s i nteresti ng to observe that, as recogni zed
by Straffi n, the concl usi ons deri ved from these model s do not refl ect the actual outcomes of
the Cuban cr i si s. A possi bl e r eason for thi s i s that these model s do not tak e i nto
consi derati on the gradual i ncrease of the threats and counterthreats of the USA and the
USSR, nor the l i mi ted i nformati on that each had about the i ntenti ons and resol ve of the
other. These aspects of a cri si s are di scussed, for i nstance, by Di xi t and Nal ebuff (1991, p.
205) under the name of bri nkmanshi p, that i s, the strategy of taki ng an opponent to the
bri nk of di saster i n order to compel hi m/her/i t to pul l back. A formal model of the Cuban
Mi ssi l e Cri si s that i ncl udes bri nkmanshi p i s presented and anal yzed by Di xi t and Skeath
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(1999, p. 345). The concl usi ons deri ved from thi s model are i n better agreement wi th the
hi stori c facts than those obtai ned wi th the model s previ ousl y descri bed.
Zagar e (1984, pp. 17n and 22n) pr esents addi ti onal exampl es of game theor eti c
anal ysi s of i nter nati onal cr i ses. Fi r st he studi es the emer gency gener ated by Egypt's
deci si on to cl ose the Strai t of Ti ran to I srael i shi ppi ng. The anal ysi s focuses on the possi bl e
r esponses of I sr ael and the U.S., taki ng i nto consi der ati on the possi bl e r eacti ons of the
USSR. Next, Zagare summari zes the parti cul arl y i nteresti ng anal ysi s of the cri ses that
cul mi nated i n the outbreak of WWI .
3.2.5. War and peace
The anal ysi s of war and peace i s one of the mai n concerns of i nternati onal rel ati ons
studi es. For i nstance, Evans and Newnham (1998, pp. 565n) i ndi cate that "(T)he i dea that
vi ol ence and war are i ntri nsi c parts of the i nternati onal system i s the di sti ncti ve hal l mark
of real i sm", that i s, of one of the conceptual bases avai l abl e for the study of i nternati onal
rel ati ons. Mi tchel l (1985, pp. 121n) i ndi cates that the i nvesti gati ons avai l abl e of i ts causes,
i ni ti ati on, process, and consequences i n i ts economi c, pol i ti cal , soci al and mi l i tary aspects
r efl ect the gr eat compl exi ty of the phenomenon. Possi bl y as a consequence of thi s, a
general l y accepted overal l theory of war i s unavai l abl e.
O'Nei l (1994, pp. 995n) summar i zes numer ous game-theor eti c studi es of many
di fferent aspects of war and peace. On thi s basi s, game theory may even be sai d to assi st i n
th e dev el opmen t of a gen er al th eor y of th e ph en omen on . Howev er , tak i n g i n to
consi der ati on the compl exi ty of war , i nter nati onal r el ati ons studi es wi l l not be abl e to
rel i nqui sh thei r l eadi ng rol e i n the devel opment of such a theory.
I n the game theoreti cal anal ysi s of war, attenti on has been concentrated onl y on i ts
mi l i tary aspects. Si mpl i fyi ng even thi s restri cted area, i t i s assumed here that 2 nati on-
states are i nvol ved i n a confl i ct. The objecti ve of each of them i s to attack the other whi l e
at the same ti me shi el di ng i tsel f from the other's attacks. On thi s basi s, 2 types of game
theoreti cal anal yses have been devel oped.
The deci si on of whether to attack fi rst or onl y respond when attacked i s studi ed i n the
fi rst type. Poundstone (1992, p. 141) i ndi cates that thi s anal ysi s was parti cul arl y rel evant
duri ng the Col d War, i n vi ew of the progressi ve devel opment of nucl ear weapons and thei r
del i very. Parti cul arl y at the ti me when the U.S. had the monopol y on these weapons and
systems, a fi rst stri ke agai nst the USSR was consi dered, at l east by several di sti ngui shed
and i nfl uenti al per sonal i ti es, to be the most r ecommendabl e pol i cy. The val i di ty of thi s
recommendati on became questi onabl e once the USSR devel oped the capabi l i ty to survi ve a
fi r st str i ke and r espond wi th an equal l y damagi ng second str i ke. Tayl or (1995, p. 166)
formal i zes the descri pti on above i n a si mpl i fi ed model i n whi ch each of the two nati on-
states i nvol ved i n a confl i ct have 2 str ategi es: fi r st and second str i ke. The concl usi ons
obtai ned wi th thi s model are an i mportant exampl e of the l i mi tati ons of game theory as a
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basi s for pol i cy deci si ons. The resul ts of the model recommend a fi rst or a second stri ke
dependi ng on the assumpti ons made wi th respect to the val uati ons of the resul ts of the
nati on-states i nvol ved, and, i n pr acti ce, these val uati ons ar e not known and cannot be
known. From thi s i t fol l ows that the mai n use of game theoreti cal model s i s as a basi s for
systemati c anal ysi s, not as a generator of rul es for actual behavi or.
Tayl or's presentati on can by extended al ong the l i nes of the so-cal l ed duel of ti mi ng
model s descri bed, for i nstance, by Bi nmore (1992, pp. 76, 129, 225) and Dresher (1981, p.
128). I n these games, 2 duel i sts approach each other. The l onger one of them wai ts to fi re,
the more l i kel y i t becomes that the other wi l l fi re fi rst and hi t hi m. On the other hand, the
cl oser the duel i sts get, the more l i kel y i t becomes that the fi rst to fi re wi l l hi t and di sabl e
the other. Contrary to the assumpti on i n the fi rst/second stri ke game, the duel i sts are not
abl e to rel oad, but the game can be extended to i ncl ude thi s possi bi l i ty.
Maoz (1985, pp. 76n) extends these anal yses wi th a model that studi es i nternati onal
rel ati onshi ps begi nni ng at the pre-confl i ct stage, fol l owed by the i ni ti ati on of a war, i ts
management, and endi ng wi th a study of the confl i ct termi nati on.
I n the second type of game theoreti c anal ysi s of war, i t i s assumed that, i n i ts essence,
al l that each warri or has to do i s to depl oy i ts armi es al ong a l i mi ted number of posts to
defend, i nvasi on r outes to pr otect or use, or a si mi l ar l i mi ted number of str ategi c
al ternati ves. Thi s has to be done taki ng i nto consi derati on the depl oyments that the enemy
i s l i kel y to make i n the same l ocati ons. The most el ementary formul ati ons of thi s probl em
are cal l ed Col onel Bl otto games. They are descri bed, for i nstance, by Davi s (1970, pp. 31,
49) and Gi nti s (2000, pp. 22, 72, 396, 429). I n these games i t i s usual l y assumed that what
one of the nati on-states gai ns, the other l oses, and vi ce-versa. For thi s reason they form
part of what are cal l ed zero-sum games.
A substanti al l y more sophi sti cated anal ysi s of a war i s presented by Varoufaki s (1991,
p. 82) who studi es the Pel oponesi an war between Athens and Sparta.
3.2.6. Battles within a war
The anal ysi s of battl es i s easi er than that of war because these events are much better
defi ned i n ti me and space. As evi dence of thi s faci l i ty, the fi rst appl i cati ons of game theory
to i nternati onal rel ati ons i ncl uded the anal ysi s of battl es.
The Battl e of the Bi smar k Sea that took pl ace dur i ng War Wor l d I I and i nvol ved
Japanese and Ameri can naval and ai r forces i s a frequentl y used exampl e. I t i s di scussed,
for i nstance, by Brams (1975, pp. 9n), Davi s (1970, pp. 13n), Di xi t and Skeath (1999, pp.
181n) and Zagar e (1984, pp. 16n). Extensi ons of thi s model ar e pr esented by Di xi t and
Nal ebuff (1991, pp. 70, 195) and Dr esher (1981, p. 145). An i nter esti ng aspect of these
anal yses i s that they are basi cal l y reformul ati ons of Col onel Bl otto games.
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Another exampl e i s the anal ysi s presented by Brams (1975, pp. 13n) and Zagare (1984,
pp. 38n) of the battl e of Avranches that took pl ace duri ng the Al l i ed i nvasi on of Normandy
duri ng Worl d War I I . Thi s model i s parti cul arl y i nteresti ng because i t i ncl udes strategi c
deci si ons such as troop movements that are not consi dered i n the war or battl e model s
menti oned previ ousl y.
3.3. Game theory and the economic relations among nation-states
3.3.1. Introduction
As i ndi cated by Strange (1991, pp. 4n), the economi c rel ati ons among nati on-states are
part of the subject matter of i nternati onal rel ati ons. As menti oned by Reynol ds (1994, pp.
73n), the abi l i ty of nati on-states to defend themsel ves and sur vi ve depends to a l ar ge
extent on thei r economi c capabi l i ti es. Even a super fi ci al obser vati on shows that a
substanti al part of the rel ati ons among nati on-states has an economi c focus. Despi te thi s,
theoreti ci ans of the fi el d, i n parti cul ar, do not appear to have shown much i nterest i n the
study of i nternati onal economi c rel ati ons. Thi s area has been l eft mai nl y to economi sts.
McMi l l an (1986, p. 2) presents a rather l ong l i st of topi cs that form part of what can be
cal l ed i nternati onal economi cs. I n the presentati on bel ow, onl y 3 topi cs from among the
numerous possi bl e al ternati ves wi l l be consi dered: agreements for economi c cooperati on,
trade, and fi nanci al i nteracti ons, whi ch wi l l be covered i n Secti ons 3.3.2, 3.3.3 and 3.3.4,
respecti vel y. I t wi l l be seen that at l east some of the game theoreti c i nstruments used for
the anal ysi s of secur i ty and defense i ssues can be appl i ed to the study of the di ffer ent
aspects of i nternati onal economi cs.
3.3.2. Agreements for economic cooperation
Agr eements for economi c cooper ati on among nati on-states can take many concr ete
forms and can pursue more substanti al and far-reachi ng economi c and pol i ti cal objecti ves
than those pursued by securi ty al l i ances. Cartel s among nati on-states such as OPEC have
the most l i mi ted goal s, and can be characteri zed by the fact that the mai n objecti ve of the
member nati on-states i s to pr esent a common fr ont to the r est of the wor l d, wi thout
modi fyi ng the i nter acti ons among themsel ves. On the other hand, ther e ar e sever al
economi c-pol i ti cal agreements whose mai n objecti ve i s to i ncrease the i nterdependence of
th e n ati on -s tates i n v ol v ed i n th em. Th i s ty pe of accor d, or der ed by i n cr eas i n g
compr ehensi veness, i ncl udes most favor ed nati on agr eements, tr ade bl ocks, fr ee tr ade
associ ati ons, custom uni ons, common mar k ets, and i ntegr ati ons or uni fi cati ons. I n
pr i nci pl e, each of these agr eements contai ns and expands the pr evi ous one. I n a
uni fi cati on, separate nati on-states deci de to become one.
The observati ons above may l ead to the concl usi on that the game theoreti c anal yses of
economi c agreements shoul d proceed al ong l i nes si mi l ar to those fol l owed i n the study of
securi ty al l i ances. Thi s i s not the case. As i ndi cated i n Secti on 3.2.2, the i nvesti gati ons of
securi ty al l i ances deal wi th the probl ems of thei r formati on and the di stri buti on of costs
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and power wi thi n them. These i ssues, at l east i n pri nci pl e, can be studi ed i n agreements
for i nter nati onal economi c cooper ati on, but thi s has not happened so far . On the other
hand, i t wi l l be seen bel ow that model s si mi l ar to those used to anal yze ar ms r aces i n
parti cul ar have been appl i ed to the study of trade and fi nanci al i nteracti ons among nati on-
states.
3.3.3. International trade
Economi sts' studi es of i nternati onal trade preceded by many years the devel opment of
game theory. Despi te thi s, as i ndi cated by Jepma, Jager and Kamphui s (1996, p. 62), even
mercanti l i sm, whi ch can be consi dered to be the fi rst formal theory of i nternati onal trade,
anal yzes the r el ati onshi ps among tr adi ng nati on-states wi th cl ear l y game theor eti c
approaches. A si mpl i fi ed formal model of thi s poi nt of vi ew i n whi ch onl y 2 nati on-states
are consi dered l eads to the concl usi on that what one of them gai ns, the other l oses. From
thi s i t fol l ows that the zero-sum games used to study battl es and war coul d be appl i ed to
the anal ysi s of the mercanti l i st theory of i nternati onal trade. Thi s has not been done, i n
part due to the fact that thi s theory i s not consi dered val i d at the present ti me.
I t i s currentl y accepted that unrestri cted trade benefi ts al l the nati on-states i nvol ved,
si nce each of them can speci al i ze i n the pr oducti on of the goods i n whi ch i t has a
comparati ve advantage over the others. Thi s l eads to the concl usi on that free trade shoul d
be the rul e i n i nternati onal economi c rel ati ons; however, thi s i s not the case.
Morrow (1994, p. 263) presents a cl ear game theoreti c expl anati on of thi s fact. I f one of
two tradi ng partners i mposes a tari ff, i t wi l l i ncrease i ts benefi ts above the free trade l evel .
Thi s reduces the benefi ts of the other tradi ng partner, who, as a consequence, attempts to
correct the i mbal ance by al so i mposi ng a tari ff. I t shoul d be cl ear that thi s struggl e i s the
trade counterpart of the arms races descri bed i n Secti on 3.2.3, and as such can al so be
anal yzed usi ng the Pri soners' Di l emma game.
Thi s si mpl i fi ed model can be and has been substanti al l y extended. Exampl es ar e
presented by Bi erman and Fernandez (1998, p. 60) and McMi l l an (1986, p. 23). Further
var i ati ons and extensi ons of the model s menti oned above ar e possi bl e. For i nstance,
Luterbacker and Thel er (1994, pp 191n) anal yze the economi c i mpl i cati ons of North-South
mi grati ons.
The one-shot i ncr ement i n tar i ff consi der ed above can l ead to what can be cal l ed a
tari ff or trade war, wi th successi ve i ncrements i n the magni tude of custom duti es. Thi s
topi c can be studi ed wi th the Dol l ar Aucti on games used to anal yze escal ati on i n ar ms
races. Extensi ve and deeper anal ysi s of thi s aspect of the topi c are presented by Conybeare
(1987) and Grossman and Hel pman (1995, pp. 675n).
3.3.4. International financial interactions
The game theor eti c model s anal yzi ng tr ade and tar i ffs cl ear l y do not deal wi th al l
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aspects of the economi c rel ati ons among nati on-states. I n parti cul ar, i t i s cl ear that the
restri cti on of i mports by means of tari ffs i s not the onl y way a nati on-state can attempt to
i mpr ove i ts bal ance of tr ade wi th other nati on-states. Thi s can al so be achi eved wi th
modi fi cati ons of the val ue of a nati on-state's cur r ency i n r el ati on to an i nter nati onal
currency such as the dol l ar; that i s, wi th modi fi cati ons of i ts exchange rate. Deval uati on of
a nati on-state's currency, that i s, an i ncrease i n i ts exchange rate, l owers the pri ce of i ts
exports and, as a consequence, i mproves the competi ti veness of i ts goods and servi ces i n
the i nternati onal markets.
These observati ons can be used as the basi s for an anal ysi s of the economi c rel ati ons
between 2 nati on-states. One shot deval uati ons can be studi ed wi th Pri soners' Di l emma
games, and the deval uati on war s that they someti mes or i gi nate, wi th Dol l ar Aucti on
games. Thi s possi bi l i ty i s i nteresti ng due to the real -l i fe i mportance of thi s phenomenon. A
deval uati on by one nati on-state can i ni ti ate a deval uati on war , i n whi ch nati on-states
al ternate i n deval uati ng thei r currenci es. I n the end thi s coul d damage not onl y thei r trade
rel ati ons, but al so thei r i nternal economi es. Jepma, Jager and Kamhui s (1996, pp. 108n)
descri be the i nternati onal efforts made to avoi d these confrontati ons. These efforts have
cul mi nated i n the formati on of the I nternati onal Monetary Fund (I MF) and the use of i ts
Speci al Dr awi ng Funds to make i t possi bl e for nati on-states wi th tempor ar y fi nanci al
pr obl ems to obtai n har d cur r ency l oans. On the other hand, the r ol e of the I MF as an
unregul ated i nternati onal economi c authori ty i s resented and resi sted by the popul ati on
and governments of many nati on-states.
A di fferent type of el ementary game theoreti c model i s used by Hamada (1996, pp. 34n
and 115n) to i ntroduce hi s anal yses of the i mpact of di fferent types of monetary reserves
(gol d, dol l ar and SDR) and of fi xed or fl exi bl e exchange rates on the i ncome and pri ces of
the i nteracti ng nati on-states and on trade and capi tal transfers between them.
The l i mi ted model s outl i ned above do not exhaust the possi bi l i ti es of game theoreti c
anal ysi s of r el ati ons between nati on-states i n whi ch r eal and monetar y i nfl uences ar e
consi dered. Hamada (1996, pp. 3n), among other authors, presents several studi es i n whi ch
basi c macr oeconomi c model s of the r eal aspects of cl osed economi es ar e extended to
anal yze the r el ati ons among 2 or mor e nati on-states and the effect of the pol i ci es that
di rectl y affect thei r bal ances of payments, as wel l as those that are ori ented mai nl y toward
regul ati ng thei r i nternal condi ti ons. These model s consi der, on the one hand, the effects of
monetary reserves, regul ati ons to faci l i tate or hi nder capi tal fl ows and the profi ts obtai ned
wi th them, and on the other, of modi fi cati ons of the i nternal rates of i nterest, the suppl y of
money, empl oyment promoti on pol i ci es, etc.
3.4. Game Theory and diplomacy
By gi vi ng an extended meani ng to the word "di pl omacy", the study of i nternati onal
rel ati ons can be sai d to cover the same ground as the study of di pl omacy. On the other
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hand, i t i s more hel pful to di sti ngui sh between the substance of the i nteracti ons among
nati on-states, that i s, defense and securi ty, economi c or cul tural and soci al i ssues, than
wi th the for m of these i nter acti ons, that i s, wi th thei r di pl omati c aspects. Thi s second
characteri zati on of di pl omacy i s used bel ow.
Reynol ds (1994, p. 135), among other authors, i ndi cates that a negoti ati on between 2
di ssenti ng nati on-states, to be cal l ed A and B, consi sts by a sequence i ni ti ated by a
pr oposal pr esented by A to r esol ve thei r di sagr eement. Nati on-state B now has 3
al ter nati ves: a) Settl e the di sagr eement under the ter ms i ncl uded i n the pr oposal , b)
pr esent a counter pr oposal , or c) br eak off the negoti ati ons. I f a counter -pr oposal i s
presented by B, A i s i n a si tuati on equi val ent to that of B, where A now has to choose
between settl i ng, counter -pr oposi ng or br eaki ng off. These al ter nati ve steps can be
repeated for as l ong as the 2 nati on-states are wi l l i ng to present counter-proposal s and to
consi der them, that i s, unti l one of them deci des to settl e or to break off negoti ati ons. The
bases for the deci si ons each nati on-state has to make at i ts turn to move are the present
val ues of the payoffs that i t expects to recei ve i n the future.
Once the el ements of a negoti ati on descri bed above, that i s, the sequence of steps to be
taken, avai l abl e opti ons at each step and payoffs' pr esent val ues, ar e avai l abl e, a wel l
defi ned game i s speci fi ed. Thi s type of game i s extensi vel y studi ed i n game theory. Some of
i ts anal ysi s pr eceeded by sever al decades Von Neumann's and Mor genster n's (1944)
famous book. The i ni ti al resul ts have been extended to consi der the possi bi l i ty that the
game can be pl ayed wi thout havi ng a wel l defi ned expectati on about when i t wi l l end, a
condi ti on that can be exempl i fi ed wi th the negoti ati ons to end the Korean War, and when
the payoffs of the pl ayers for settl i ng thei r di sagreement or for breaki ng off the negoti ati on
are not known wi th certai nty.
Di xi t and Skeath (1999, pp. 298n) present an appl i cati on of some of the game theoreti c
i nstruments menti oned above to the study of U.S.-Japan trade negoti ati ons. Thi s anal ysi s
i s parti cul arl y i nteresti ng i n that i t i s especi al l y attenti ve to the promi ses and threats that
the actor s can make to each other , and the i mpact that these pl edges can have on the
i nteracti ng nati on-states.
A mor e extended and sophi sti cated anal ysi s of these topi cs i s pr esented by Dupont
(1994, pp. 156n), who uses a game theor eti c model to study the negoti ati ons between
Swi tzerl and and the League of Nati ons and those between the European Communi ty and
the Eur opean Fr ee Tr ade Associ ati on. Hovi (1998) pr esents a book l ength di scussi on of
these topi cs.
An obstacl e for the appl i cati on of the model outl i ned her e to actual negoti ati on
pr ocesses i s r ai sed as a consequence of what can be cal l ed a str uctur al defect of game
theory: i t provi des, at best, very l i mi ted gui dance for the speci fi cati on of the payoffs that
the negoti ati ng nati on-states shoul d recei ve when they sel ect each of the strategi es they
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have avai l abl e. I t i s si mpl y assumed that certai n or uncertai n i nformati on about payoffs i s
avai l abl e. However, as menti oned by Reynol ds (1994, pp. 130n) i mportant determi nants of
a nati on-state's payoffs are the promi ses and threats that i ts counterpart can make and
the mi l i tar y, economi c and cul tur al and soci al i nstr uments that the pr omi si ng or
thr eateni ng nati on-state can use to i mpl ement i ts pl edges. I t shoul d be cl ear that thi s
l i mi tati on restri cts the appl i cabi l i ty of game theory to i nternati onal negoti ati ons.
Brams, Doherty and Wei der (1994, pp. 95n) present an extensi on of the model outl i ned
above i n whi ch the controversi al i ssues bei ng negoti ated and the preferences of the nati on-
states negoti ati ng them are consi dered i n some detai l . Speci fi cal l y, these authors anal yze
the GATT negoti ati ons i ni ti ated i n Ur uguay i n 1986. They pay speci al attenti on to the
r ol es of the Eur opean Communi ty, Japan and the U.S.A., consi der ed to be the major
pl ayers, and concl ude that thei r model accuratel y descri bes the negoti ati on sequence i n
whi ch the actor s moved fr om thei r most pr efer r ed to l ess favor ed posi ti ons unti l they
reached an i mpasse and broke up the process.
3.5. An elementary example
The object of thi s Secti on i s to present a si mpl i fi ed appl i cati on of game theory to a
cur r ent pr obl em. Thi s pr ovi des an oppor tuni ty to descr i be the mai n steps needed to
construct a game theoreti cal model of real events, and al so to el aborate on some of the
contri buti ons that game theory can make to the study of i nternati onal rel ati ons and to cal l
attenti on to the ri sks that the constructi on and use of these model s may have.
The i ni ti al step i n the constructi on of any game theoreti c model i s the i denti fi cati on of
the actor s i nvol ved i n the i nter acti on to be anal yzed. To a l ar ge extent thi s step al so
determi nes the frame of reference of the anal ysi s.
A si mpl i fi ed model of the I srael i -Pal esti ni an confl i ct wi l l be constructed bel ow. I t wi l l
be assumed that these ar e the onl y r el evant actor s i n the pr ocess. Thi s cl ear l y i s a
si gni fi cant si mpl i fi cati on. For an anal ysi s i n whi ch attenti on i s al so gi ven to the i nfl uence
of i nternal condi ti ons i n I srael and the Pal esti ni an Terri tori es, i t may be more useful to
i denti fy Sharon and Arafat as the rel evant actors. Thi s woul d make i t possi bl e to consi der
that i n the two "nati on-states", di ffer ent popul ati on gr oups ar e the r eal actor s i n the
confl i ct. An addi ti onal aspect not taken i nto consi derati on i n the framework bei ng outl i ned
i s that al l the other nati on-states i n the Arab Worl d are much more than si mpl y spectators
at the i nteracti ons between I srael i s and Pal esti ni ans. Fi nal l y, and at l east i n part i n vi ew
of the economi c si gni fi cance of the Arab Worl d, Chi na, the European Uni on, Japan, Russi a
and the U.S. coul d be consi dered actors more or l ess di rectl y i nvol ved i n the confl i ct. These
observati ons show some of the benefi ts and l i mi tati ons of the game theoreti c approach: i t
requi res a si mpl i fi ed and wel l -defi ned poi nt of departure. The si mpl i fi cati on hel ps to cal l
attenti on to the mai n aspects of the i nteracti on bei ng studi ed; unfortunatel y, at the cost of
excl udi ng other rel evant aspects.
Game Theory as an I nstrument for the Anal ysi s of I nternati onal Rel ati onsCorrea
201 15
Next, the acti ons or str ategi es that the actor s may use must be speci fi ed. Agai n
si mpl i fyi ng the probl em as much as possi bl e, i t can be sai d that each of the 2 actors has
onl y 2 str ategi es: cooper ati on and confr ontati on. I t shoul d be cl ear that each of these
strategi es represents wi th a si ngl e poi nt what real l y i s a conti nuum between unfavorabl e
and favorabl e al ternati ves.
Fi nal l y, the payoffs that the actor s woul d r ecei ve when they enact thei r str ategi es
must be speci fi ed. For thi s presentati on, i t i s suffi ci ent to i ndi cate the ranki ngs that the
actors wi l l gi ve to the di fferent outcomes of thei r i nteracti on. I t i s assumed that the most
preferred outcome of both I srael i s and Pal esti ni ans i s to adopt a confrontati onal stance
whi l e the other actor cooperates. The basi s for thi s assumpti on i s that the confrontati onal
actor expects to obtai n al l i t wants, whi l e the cooperati ve actor makes al l the concessi ons.
I n addi ti on, there i s no real armed confl i ct. Next i t i s assumed that both actors are wi l l i ng
to cooper ate, that i s, to make some concessi ons as a basi s for a l asti ng peace. Thi s i s
fol l owed i n the order of preferences by both actors behavi ng i n a non-cooperati ve fashi on,
whi ch woul d gener ate vi ol ence between the 2 "nati on-states". Fi nal l y, the l east desi r ed
outcome for each actor i s to cooperate whi l e the other has a confrontati onal atti tude. Wi th
the i nformati on presented above i t i s possi bl e to speci fy the matri x of the game i n Tabl e 1.
Table 1: Simplified game theoretic representation of the Israeli-Palestinian conflict
Col umn Pal esti ni an Strategi es
Cooperati on Confrontati on
Row I srael i Strategi es
Cooperati on (3,3) (1,4)
Confrontati on (4,1) (2,2)
The numbers i n parenthesi s i n Tabl e 1 represent the actors' ranki ngs of the outcomes
that woul d be real i zed wi th the di fferent strategi es. The fi rst number i n each parenthesi s
i s the I srael i ranki ng, and the second, the Pal esti ni an ranki ng. For i nstance, the pai r (1,4)
on the ri ght si de of the fi rst row i ndi cates that the l east preferred al ternati ve, ranked 1 by
the I sr ael i s, i s to cooper ate when the Pal esti ni ans adopt a confr ontati onal atti tude.
However , the Pal esti ni ans consi der thi s thei r most pr efer r ed condi ti on and gi ve i t a
r anki ng of 4. On the other hand, the combi nati on I sr ael i cooper ati on and Pal esti ni an
confrontati on i s ranked (4,1) as shown on the l eft si de of the second row of Tabl e 1.
The anal ysi s of the r anki ngs shows that, i n agr eement wi th thei r pr efer ences, the
actor s wi l l sel ect a confr ontati onal atti tude. Speci fi cal l y, r egar dl ess of whether the
Pal esti ni ans cooperate or confront, the I srael i s prefer confrontati on as shown by the l arger
val ues i n the fi r st entr i es of the pai r s i n the second r ow of Tabl e 1. Si mi l ar condi ti ons
prevai l for the Pal esti ni ans, whose ranki ngs i n the second entri es of the pai rs i n the second
col umn of Tabl e 1 ar e l ar ger than the cor r espondi ng entr i es i n the fi r st col umn of the
Tabl e.
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16 202
These obser vati ons show that the r el ati ons between I sr ael i s and Pal esti ni ans ar e
l i kel y to be confrontati onal despi te that thi s gi ves them the outcome that they val ue at
(2,2). Thi s happen despi te that both actors woul d be better off i f both chose to cooperate
wi th each other and have an outcome that they val ue at (3,3).
Fur ther anal ysi s of the pr obl em shows two i mpor tant consequences of the model
consi der ed. On the one hand, i t can be demonstr ated that i f the game i s r epeated over
ti me, condi ti ons i n whi ch the 2 actors cooperate can be created wi th thei r own behavi or.
However, these condi ti ons wi l l al ways be somewhat fragi l e. On the other hand, i t can al so
be shown that an outsi de arbi ter coul d speci fy a reasonabl e bal ance of concessi ons by the 2
confl i cti ng actors and achi eve i n thi s way a more stabl e cooperati on between them.
Mi shal , Schmei dl er and Sened (1990, pp. 336n) have a substanti al l y more el aborate
form of thi s model . They take i nto consi derati on that nei ther I srael nor the Pal esti ni ans
have rel i abl e i nformati on about the strategi es avai l abl e to each other, or thei r preferences
over the uncertai n outcomes that can be achi eved.
The unfortunate events i n the l ast few years show that the concl usi ons arri ved at wi th
the model s summar i zed her e ar e to a l ar ge extent a r easonabl e r efl ecti on of what i s
actual l y taki ng pl ace.
4. Conclusions
Secti on 1 i ndi cates that one of the objecti ves of thi s paper i s to show that el ementary
game theor eti c model s can be used a) to concentr ate attenti on on the cor e el ements of
i nteracti ons among nati on-states and b) to speci fy the ways these i nteracti ons are l i kel y to
proceed. I n Secti on 3 the substanti ve i ssues i n the i nteracti ons among nati on-states were
i denti fi ed and char acter i zed, and the game theor eti c appr oaches to anal yze them, or at
l east some representati ve exampl es, were di scussed. Onl y the readers of thi s paper can
deci de whether the presentati on above has achi eved the objecti ves pursued.
I n thi s Secti on an anal ysi s i s made of the common el ements of the di ffer ent topi cs
presented i n order to cal l attenti on to the contri buti on that game theory can make as a
useful i nstrument for theoreti ci ans and practi ti oners of i nternati onal rel ati ons, and al so to
the l i mi tati ons of thi s contri buti on.
Game theor eti ci ans, l i ke any mathemati ci ans, ar e l i ke young chi l dr en str i vi ng to
construct l atti ces or trel l i ses wi th sti cks. They i denti fy the sti cks that are needed, thei r
shape and strength, how to put them together and how sol i d i s the fi ni shed structure. They
are very l i ttl e or not at al l concerned about any possi bl e practi cal use of the frameworks
they have created.
Game Theory as an I nstrument for the Anal ysi s of I nternati onal Rel ati onsCorrea
203 17
At a basi c l evel , the sti cks used by game theoreti ci ans are the number of pl ayers, thei r
strategi es, and the payoffs that each pl ayer wi l l recei ve wi th each combi nati on of strategi es
used. The fi nal trel l i s takes the form of mathemati cal theorems i ndi cati ng the strategi es
that pl ayers i nterested onl y i n themsel ves shoul d adopt, or that there i s no combi nati on of
strategi es that woul d generate outcomes that are si mul taneousl y consi dered acceptabl e by
al l the pl ayer s. As al r eady obser ved, these tr el l i ses by themsel ves, excl udi ng the
sati sfacti on and Nobel pr i zes that they br i ng to thei r constr uctor s, do not have any
practi cal use. Game theory i denti fi es the components of any i nteracti on that must recei ve
attenti on, shows how they shoul d be organi zed and anal yzed, and the fi nal form that the
i nteracti ons anal yzed may take. To use thi s i n practi ce i t i s necessary to i denti fy real -l i fe
counterparts of the pl ayers, strategi es and payoffs. Pure game theoreti ci ans, regardl ess of
thei r br i l l i ance, cannot do thi s. Thi s means that i n the case of i nter nati onal r el ati ons,
theoreti ci ans and practi ti oners of thi s fi el d must speci fy wi th thei r knowl edge of actual
i nter acti ons among nati on-states or other i nter nati onal actor s the sti cks use by game
theoreti ci ans. Thi s knowl edge i s acqui red by studyi ng the hi story and current unfol di ng of
the i nteracti ons to be studi ed wi th game theoreti c methods. Once the sti cks needed are
s peci fi ed, i t i s pos s i bl e to s tr u ctu r e th em i n agr eemen t wi th th e game th eor eti c
r equi r ements. Havi ng done thi s, the theor ems of game theor y br i ng for th expected and
unexpected characteri sti cs of the i nteracti ons anal yzed and provi de bases for forecasti ng
thei r futur e. Thi s can be done wi thout knowi ng the actual mathemati cal pr oof of the
theorems.
An al ternati ve metaphor of the rel ati onshi p expl ai ned above coul d be that game theory
provi des a trel l i s that coul d hel p the pl ant of i nternati onal rel ati ons to grow. However, the
ground where the trel l i s and the pl ant stand, the seeds and the care needed by the pl ant
must be provi ded by the theoreti ci ans and practi ti oners of the fi el d. Game theoreti ci ans
cannot do i t. On the other hand, a better pl ant i s obtai ned wi th an appropri ate trel l i s, and
some pl ants, wi thout a trel l i s, woul d not grow at al l .
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ABSTRACT
The object of thi s paper i s to demonstr ate the possi bi l i ti es and l i mi tati ons of game
theory as an i nstrument for the study of i nternati onal rel ati ons. The approach to be used
descri bes el ementary game theoreti c model s as an i ntegral part of i nternati onal rel ati ons,
rather than as exampl es of the mathemati cs of game theory. The paper i s addressed to
theoreti ci ans and practi ti oners of i nternati onal rel ati ons not parti cul arl y versed i n game
theory, rather than to those who are fl uent i n i ts mathemati cal l anguage and i ntri caci es.
The presentati on concl udes wi th some general observati ons on the uses and l i mi tati ons of
game theory as an i nstrument for the study of i nternati onal rel ati ons.
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