Attacking a nuclear facility: The impact of a noisy intelligence with unknown quality

Siyu Ma and Dov Biran

Games and Economic Behavior, 2023, vol. 141, issue C, 472-483

Abstract: This note stems from Jelnov et al. (2017), which analyzed the interaction of two enemy nations– Player 1 (the weak nation) and Player 2 (the strong nation). 1 (he) wishes to develop a nuclear bomb, and 2 (she) who employs a noisy intelligence system, IS, aims to deter him. Based on the signal sent by IS, 2 decides whether to attack 1. If the precision (α) of IS is commonly known, not only 2 is strictly better off with a better quality (higher precision) IS but also is 1. In contrast, this note shows that if α is 2's private information, 1 is not necessarily better off from a more accurate IS, and 2 is only weakly better off. Moreover, the equilibrium outcome depends on 1's estimate of IS's precision (E(α)). A greater estimated precision leads to less aggressive behaviors of both players, thereby reducing the chance of a conflict.

Keywords: Nuclear deterrence; Intelligence system; Perfect Bayesian equilibrium (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:141:y:2023:i:c:p:472-483

DOI: 10.1016/j.geb.2023.07.006

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