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Game Theory (ECO4400) Book: Games of Strategy, by Dixit & Skeath Chapter 14: Brinkmanship This is a case study where we get more closely into the details of a specific game: nuclear brinkmanship in the Cuban missile crisis of 1962. Suggested reading: http://en.wikipedia.org/wiki/Brinkmanship http://www.answers.com/topic/brinkmanship Recall that a threat is a response rule, and that the action implies a cost for both players (not only to the one suffering the threat). If the threat succeeds, the action is not carried out. Apparently, there is no upper limit in the cost of the action. But what if there are errors (the threat failing to achieve its purpose or the action happening by accident? This forces the strategist to use the minimal threat that achieves its purpose. If a smaller threat is not available, a large threat can be scaled down by making its fulfillment probabilistic. Brinkmanship is the creation and deployment of such a probabilistic threat. It is a subtle and dangerous strategy. Many real conflicts (strikes and breakup of relationships) are examples of brinkmanship gone wrong. 1. A brief narration of events. In the fall of 1962, The URSS started to place medium and intermediate range missiles in Cuba. That was very close to the US. The soviets at first denied it, but then argued that it was defensive, to prevent the US from invading Cuba. Kennedy kept it private at first, before deciding what to do. Many experts were consulted. They thought the soviets could also use the missiles as a threat to obtain removal of British and American presence in West Berlin. The options that the US discussed: 1) an air strike at the missiles; 2) a wider air strike including aircraft; 3) a full-scale invasion of Cuba. Later, they also discussed a blockade. Agreement was not easy, but Kennedy finally announced the blockade on TV. He demanded a withdrawal of the missiles. At the same time, the soviets (secretly) had decided that they were willing to withdraw from Cuba in exchange of a US promise not to invade Cuba. The blockade went into effect. Tension was mounting and neither side’s actions were as cautious as the top-level politicians would have liked. The soviet leader Khrushchev sent Kennedy a private letter making the offer mentioned. In the US, they feared that the blockade would not work since in the TV announcement the threat did not have a deadline (hence, it was vulnerable to the rival’s procrastination: recall salami tactics). The situation worsened and there were some minor firing and shootings. Invasion was planned because it looked inevitable.
2. Knowing that the missiles are in Cuba. Very simple? 3.Guillermo Sabbioni Kennedy sent a final threat to the URSS: “1) The soviets stop missile installation in Cuba. The blockade wanted to demonstrate the credibility of the US threat. 3) the US missiles in Turkey are removed. or the opponent may comply but the action may occur by mistake. All those factors made the outcome of any decision by the top-level commanders somewhat unpredictable. there is an implicit victory for the URSS (-2. suppose the soviet’s payoffs were the opposite: -8 for withdrawal and -4 for defiance (hardliners soviets: they prefer annihilation rather than humiliation… better dead than red-white-blue). For the US. There was a substantial risk of the threat going wrong. complicating the accuracy of payoff estimation. Kennedy immediately replied. If the URSS withdraw. an answer is required within 24 hours or there would be drastic consequences”. If no threat. 2 . -8).e. welcoming the soviet decision. on Oct 28. The threat worked and the URSS complied. nuclear war leads to (-10. the game was not really a two-player game (each of both side was a complex coalition as well. See fig 14. If the URSS defy. Maybe. 2) the US does not invade Cuba.1 Find the SPE: if a threat. 2. The threat was sufficiently costly for the URSS so it acted in accordance to the US wishes and the bad action was not carried over (fortunately). The SPE is now (don’t threat. To model this uncertainty. -4). Looking ahead. getting compellence or deterrence). and people change their views as time passed). If there is a threat. but that is the nature of a threat. See fig 14. the US should threat (+1 vs -2). the US can threat or not. it takes the lesser of 2 evils.1. defy). Then. 2). Accounting for additional complexities A threat carries two risks: the opponent may defy it and you have to carry out the costly action. The missile crisis was full of uncertainties. and such uncertainty could make a simple threat to large to be acceptable to the threatener. A simple game-theoretic explanation The US wanted the URSS to remove missiles from Cuba (achieve compellence). the US wins something and the URSS is humiliated (1. Also. the cost of the action should have an upper bound while still doing its job (i. there was some lack of information and communication within each side. Khrushchev made public his decision of accepting the deal. The US deployed a threat: soviet failure to comply would lead to a nuclear war. Finally. the URSS should withdraw (-4 vs -8). the URSS can defy or withdraw the missiles. Nuclear annihilation was equally frightening for the URSS and the US. 1 The relative ranking of the outcome makes the work (specific payoffs are of course arguable).
make the threat if 1-11p>-2. that is also bad for me. If the soviets defy the threat. which is lower than 26q for any value of q. while the lower branch is like fig 14. rollback can be done when the URSS moves. the US should threat. The upper branch is like fig 14. 2 Kennedy once said that the prob of the blockade leading to war was between 1/3 and ½. 3 . you say ““if you don’t comply. With prob 1-q the US give up and allow the missiles in Cuba. that is. if they withdraw they get -8. there is -8 with prob q (war) and 2 with prob 1-q (US give up) = 2-10q. For the soft soviets defying. With a probabilistic threat. Then.3. This lower bound on q is called the effectiveness condition. For the hardliner soviets defying the threat. if q>0. If they withdraw. Then. the US don’t have a choice there: a Russian-roulette revolver “takes” the decision. 4.6. The expected payoff of a threat gives then -10p+1-p=1-11p. Only if the prob p that the soviets are hardliners is small enough. to deter the soft soviets the threat must contain at least 60% chance of war. If the soviets defy.27. even the soft soviets would defy the threat. Then. that is if p<3/11=0. the US gets -10 with prob q (war occurs) and -2 with prob 1-q (US give up) = -2-8q. Then.4. a threat yields -10 with prob p and 1 with prob 1-p. However. but later I will be powerless to reduce that risk”. If they are soft (lower branch). there is a risk that this bad thing for you will happen. The threat is now that war will occur with probability q.2 The complex tree is shown in fig 14. See fig 14. this bad thing for you will happen. they defy a threat. If they are hardliners (upper branch). If q is not too big. that is also bad for me. they get -4 with prob q and 2 if the US give up (with prob 1-q) = 2-6q. You retain sufficient control to keep the risk of the action from becoming too large and the threat too costly. based on past experience. but the threat is credible due to my reputation”. estimate that the soviets are hardliners with probability p. they get the sure payoff -4. the US must compare the expected payoffs of threat or not threat. they withdraw. you say: “if you don’t comply.1 (soft soviets). so its nodes are encircled in an information set. Yet. If no threat is made. Then. That “controlled lack of control” is obviously difficult to achieve. It requires two apparently inconsistent elements: You let matters get enough out of your control that you can not have full freedom after the fact to refrain from taking the action.2 (hardliner soviets). Nature decides if soviets are hardliners or not. A probabilistic threat With a simple threat. withdrawal is better if -4>2-10q. The US don’t know which soviets they are facing.Guillermo Sabbioni What if we actually account for the fact that the US do not know if the soviets are hardliners or not? Say the US. The hardliner soviets then always defy the threat. Brinkmanship is the creation and control of a suitable risk. the US gets -2.
make the threat if -8pq-3p+1>-2. the prob of war must be small enough or the US will not make the threat at all (acceptability condition for the US). 5. Brinkmanship in practice is the gradual escalation of the risk of mutual harm. But if p>0. When q increases.27<p<0. If p>0.6. parents and child.5. the US gets -2. Examples: company and union. If not making the threat. etc. SUGGESTED EXERCISES: 1 and 2. It is like a chicken game in real time. Then. he should use the minimum possible q=0. husband and wife. this also depends on p (the larger the prob p of hardliner soviets. We had that q has to be big enough to convince even the soft soviets: q>0. The US should explore (see pink area) the boundaries from below (start with a low q). Of course.27 the US can threat using certainty of war. which means q<(3/8)*(1-p)/p. Read yourselves about the uncertainty about p and how it affects the correct q to use.38 the first one will occur (soviets give up).38. The US explores both parties’ limits as q increases.38 the second one occurs (threat is too risky and the US gives up). Practicing brinkmanship If p<0.38 the US should use brinkmanship. Now see fig 14.6 (effectiveness condition). If 0. If p>0. Then. and knowing that the soft soviets will withdraw if the effectiveness condition is satisfied. the question is: how risky can the threat be and still be tolerable to the US? The expected payoff of a threat for the US is -2-8q with prob p (the soviets are hardliners) and +1 with prob 1-p (soviets are soft and comply) = -8pq-3p+1.38 the US has to give up. But even then. Horizontal axis: prob p that soviets are hardliners. If p<0.Guillermo Sabbioni Knowing that the hardliner soviets will defy the threat. The gray area depicts the p. And we also had that q has to be small enough to be tolerable to the US (below the curve that depends on p). the smaller the risk of mutual disaster q that the US finds acceptable). Vertical axis: prob q that war occurs if soviets defy. 4 .q combinations that make a threat acceptable (to the US) and credible (to the soviets). there is no q acceptable for the US and then brinkmanship will not work. the US will find either the horizontal line (effectiveness condition) or the curve (acceptability condition).
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