How Fast and How Expensive? Uncertainty and Incentives in Nuclear Negotiations

Abstract: There is a growing consensus among researchers and policymakers alike that negotiated settlements can convince would-be proliferators to forgo nuclear weapons. However, uncertainty over the cost of weapons and development times interferes with the bargaining process. To sort out the incentives, I apply Bayesian mechanism design to a class of nuclear negotiation games. This methodology uncovers many properties that must hold across equilibria of all game forms. First, the probability of proliferation, the size of a settlement, equilibrium payoffs, and the value of bargaining must be monotonic in the proliferator’s cost and development time. Second, uncertainty over development time represents a greater challenge to negotiations between military rivals, as no game form may exist that guarantees nonproliferation. Finally, game forms with nonproliferation equilibria are more likely to exist between military rivals than allies and when expected proliferation speeds are fast.

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