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Achieving Cooperation In The Arms Race Game. Two New Approaches, Dimitris Voliotis

Dimitris Voliotis

When the risks of national security associated to inferior military power are perceived to be high, the interaction between rival countries resembles a prisoner dilemma with an arms race as its inevitable dominant strategy equilibrium. This paper investigates two different ideas. First, we incorporate in the static form of the game a psychological payoff associated to the perception of motivations and, second we extend the game in a dynamic setup, with overlapping terms of statesmen. In both cases, we find ways out of the arms race equilibrium.