This study argues for a behavioral interpretation of rational choice in a changing environment that potentially restores the equilibria of discounted repeated games as useful descriptors of long-term bilateral relations between nation-states. The analysis reveals that all subgame perfect...

The authors develop a characterization of subgame perfect equilibrium strategies in discounted repeated games that highlights a class of strategies called countervailing. When using countervailing strategies, the players focus on manipulating the other side's payoff to induce his cooperation....

We propose that fully informed rivals' ability to bargain on the terms of an alternative status quo can lead to the failure of asymmetric deterrence. The model we develop to support this claim allows repeated rounds of bargaining, crisis, and war until one of the rivals agrees to the other...