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Game Theory for the US and North Korea

Following North Korea’s successful hydrogen bomb test and its relentless missile testing, identifying a sensible solution which prevents war between the United States and North Korea seems daunting and to many, even hopeless. What if one were to apply Game Theory to identify a reasonable resolution?  The objective of the game would be one that yields a positive outcome to both sides. Ideally, for the United States, this would result in North Korea ending its nuclear weapons program. In return, North Korea would have its sanctions lifted and be given some other economic incentives.

Thus far, the United States has been using economic pressure as a strategy to effect a change in behavior from North Korea. Except for a brief period of cooperation during the Clinton era, the response has been no change in behavior and has led to an increasing nuclear capability which further threatens the United States. One of the underlying assumptions of Game Theory is that both sides understand the rules. It is likely that this is the case. However, a second assumption is that each side is rational. This assumption cannot be relied upon as North Korea’s dictator, Kim Jong Un, may be irrational and thus willing to utilize his nuclear weapons without regard to the risks involved (such as a counter-attack). If he is bent on reaching his goals regardless of risk, then he is surely not interested in meeting a state of Nash Equilibrium. North Korea has clearly won the current game and if nothing is done, who knows how many hundreds of nuclear warheads will be pointed at the U.S. in the near future by North Korea and whomever other countries they sell them to. It is clear that the United States should alter its strategy in order to defend itself from possible annihilation from mad dictators, even if a Nash Equilibrium cannot be reached. North Korea has responded to sanctions by doing nothing. It’s time for the United States to make its next move.

 

References:

https://www.forbes.com/sites/kotlikoff/2017/08/11/using-game-theory-to-handle-north-korea/#6c2c17d53603

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