The Application of Game Theory in Nuclear Deterrence

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Journal Title
Journal ISSN
Volume Title
School of Business | Bachelor's thesis
Date
2022
Major/Subject
Mcode
Degree programme
Taloustiede
Language
en
Pages
29 + 1
Series
Abstract
The reasons for the absence of nuclear warfare between two nations despite the widespread ownership of nuclear weapons have been studied for decades. An often-used explanation for this is nuclear deterrence, whereby owning nuclear weapons deters other nations with hostile interests from attacking in any way. This literature review studies whether game theory can be applied to explain the absence of nuclear war and if nuclear deterrence is a rational explanation for the nuclear peace that has prevailed so far since 1945. I explain the basic elements of game theory and dive deeper into the concepts that are often used in game-theoretic applications of nuclear deterrence. I also present the two-player extensive-form games developed by Zagare (1992) and Kraig (1999) for the purpose of modelling deterrence. I discuss the applicability of models such as these, and whether in general game-theoretic models can be used to accurately explain nuclear deterrence or not. I find that under certain assumptions, game-theoretic models can explain nuclear deterrence. However, criticism of the application of game theory to nuclear deterrence generally revolves around the assumptions that must be made for this theory to apply here.
Description
Thesis advisor
Murto, Pauli
Keywords
extensive-form games, rationality, threats, credibility, capability
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Citation