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Rational Deterrence in an Imperfect World

Barry Nalebuff
World Politics
Vol. 43, No. 3 (Apr., 1991), pp. 313-335
DOI: 10.2307/2010397
Stable URL: http://www.jstor.org/stable/2010397
Page Count: 23
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Rational Deterrence in an Imperfect World
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Abstract

This paper considers the role of reputation and signaling in establishing deterrence. The cost-benefit calculations of rational deterrence are extended to allow for incomplete or imperfect information. The author uses requirements of a sequential equilibrium (and its refinements) to impose consistency restrictions on how strategic players signal a reputation for strength. This provides a way to interpret potentially misleading reputations and offers a resolution to the reputation paradox of Jervis.

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