Farsightedness in Games: Stabilizing Cooperation in International Conflict

Brams, Steven J. and Ismail, Mehmet S. (2019): Farsightedness in Games: Stabilizing Cooperation in International Conflict.

Abstract

We show that a cooperative outcome—one that is at least next-best for the players—is not a Nash equilibrium (NE) in 19 of the 57 2 x 2 strict ordinal conflict games (33%), including Prisoners’ Dilemma and Chicken. Auspiciously, in 16 of these games (84%), cooperative outcomes are nonmyopic equilibria (NMEs) when the players make farsighted calculations, based on backward induction; in the other three games, credible threats induce cooperation. More generally, in all finite normal-form games, if players’ preferences are strict, farsighted calculations stabilize at least one Pareto-optimal NME. We illustrate the choice of NMEs that are not NEs by two cases in international relations: (i) no first use of nuclear weapons, chosen by the protagonists in the 1962 Cuban missile crisis and since adopted by some nuclear powers; and (ii) the 2015 agreement between Iran, and a coalition of the United States and other countries, that has been abrogated by the United States but has forestalled Iran’s possible development of nuclear weapons.

• Item Type: MPRA Paper
• Language: English
• Keywords: Farsightedness; nonmyopic equilibrium; game theory; cooperation; international conflict
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; F - International Economics > F5 - International Relations, National Security, and International Political Economy > F51 - International Conflicts ; Negotiations ; Sanctions

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