Modeling 'Massive Retaliation'

A generic asymmetric two-stage escalation model of incomplete information is used to examine strategic relationships in which one player adopts a defense posture akin to the “Massive Retaliation†policy of the Eisenhower administration that relies only on the threat of escalation to deter aggression. In the model, a challenger must decide whether to contest the status quo and a defender must choose between capitulation and escalation. Each player has probabilistic knowledge of the other's preference between conceding and fighting an all-out war. All perfect Bayesian equilibria of the Incomplete Information Escalation game are identified and interpreted. Unlike two-stage games of complete information, war and escalation may be rational outcomes under incomplete information. At certain times, these outcomes may be inevitable. Challengers preferring conflict to capitulation always initiate conflict, whatever the information state of the game. But when information is incomplete, even challengers with an aversion to all-out war may rationally precipitate a crisis. Similarly, when it is unsure of a challenger's preferences, even a defender preferring not to wage war may rationally choose to escalate a conflict. The conditions associated with a stable status quo, a successful challenge, an escalated conflict, and war are discussed.