Abstract

Deterrence means threatening to retaliate against an attack in order to deter it in the first place. The central problem with a policy of deterrence is that the threat of retaliation may not be credible if retaliation leads to a worse outcome - perhaps a nuclear holocaust - than a side would suffer from absorbing a limited first strike and not retaliating. - The optimality of deterrence is analyzed by means of a Deterrence Game based on Chicken, in which each player chooses a probability (or level) of preemption, and of retaliation if preempted. The Nash equilibria, or stable outcomes, in this game are compared with those in a Star Wars Game, in which the preemption and retaliation levels are constrained by the defensive capabilities of each side. Unlike threats in the Deterrence Game, which can always stabilize the cooperative outcome, mutual preemption emerges as an equilibrium in the Star Wars Game, underscoring the problem - particularly if defensive capabilities are unbalanced - that deterrence will be subverted by the development of Star Wars.