Game Theory and the Spiral Model

When one state engages in a military buildup, other states sometimes take this as a sign that it is more aggressive or expansionist than they previously thought. Some argue that such increases in mutual suspicion can drive arms races and even lead to war. Psychological bias is often invoked to explain this pattern of growing suspicions leading to hostility. This article presents an incomplete information model of an arms race and investigates when escalations should rationally generate increased fears and when, in order to reduce such fears, security seekers can refrain from building. It shows that escalations rationally provoke fear even in the absence of bias and that weak states and states facing high costs of arms racing and war will be especially likely to refrain from building as a way of signaling benign intentions.