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Executive Summary

 
Despite the Singapore and Hanoi summit meetings between Trump and Kim Jong-un and inter-Korean summits between Moon Jae-in and Kim Jong-un, there has not been any real progress towards ‘final, fully-verified denuclearization’ over two years. If anything, all signs point to the contrary. At a military meeting in May, 2020, Kim Jong-un was reported to have called for stronger “nuclear war deterrence” by the state media.1 In the following month, North Korea blew up an inter-Korean liaison office in the North Korean city of Kaesong. With the prospect of North Korea’s denuclearization diminishing, it is imperative that ‘deterrence,’ our subject of interest, is robustly maintained against the North Korea’s growing nuclear threat. In particular, we have become interested in Perfect Deterrence Theory developed by Zagare & Kilgour as an alternative to classical deterrence theory. Above all, its predictions are more in agreement with empirical findings and free of irrationality and, therefore, the theory has been chosen to be the basis of our study.2 It has basically provided a framework for exploring South Korea’s deterrence against North Korea. Our role was to understand its solutions3 (i.e., Perfect Bayesian equilibria’) found by Zagare & Kilgour, and to draw out valuable implications in the context of North-South Korea. Our study was limited to Direct Deterrence4 which includes the Generalized Mutual Deterrence Game and the Unilateral Deterrence Game. Our study has drawn extensively on their book “Perfect Deterrence.3

Chapter 1 is a brief overview of Perfect Deterrence Theory. Some advantages of this theory over classical deterrence theory are mentioned. One advantage is that Zagare & Kilgour’s imposition of the ‘Perfectness’ condition prevents us from encountering irrational solutions later on (e.g., classical deterrence theory cannot explain the paradox of mutual deterrence). The theory also explores two differentiated players (i.e., challenger and defender), and gives due consideration to the ‘status quo’ which was much neglected in favor of the cost of conflict. It also provides rationale for minimum deterrence.

Chapter 2 reviews basic concepts in Perfect Deterrence Theory that are required for understanding the later chapters. ‘Capability’ and ‘credibility’ are two basic components which play critical roles in the theory. Capability is one’s ability to hurt one’s adversary while credibility is one’s willingness to fight rather than capitulate. Some examples are provided in the context of Korea. The Korean War (1950-1953) is an example of incapable South being invaded by capable North. The Admiral Yi Sun-sin’s famous saying, “Those who seek death shall live. Those who seek life shall die,” before defeating Japanese fleet at the battle of Myeongnyang in 1597 epitomizes the highest level of credibility. By contrast, the sinking of Cheonan, a South Korean navy corvette, and the subsequent shelling on the island of Yeonpyeong in 2010 could be partly attributed to low credibility. Finally, the definitions of type ‘Soft’ and type ‘Hard’ are given and the incomplete information game is explained using these types.

Chapter 3 introduces the Generalized Mutual Deterrence Game. Our primary interest is in the Sure-Thing Deterrence Equilibrium among all solutions found by Zagare & Kilgour.5 Its existence conditions contain North Korea’s utilities for the ‘Status Quo (NSQ),’ ‘Conflict (NDD+)’ and ‘North Korea wins (NDC).’ We have examined each utility variable and suggested ways to strengthen deterrence (i.e., robustly fulfilling the existence conditions). We caution against, for example, blindly increasing the value of NSQ in the absence of genuine progress in North Korea’s denuclearization. The only sure way to bring about deterrence is to decrease NDD+. This necessitates a show of force including, for example, a display of new high-tech F35A Joint Strike Fighters and the establishment of ready ‘Decapitation Unit.’ Also, South Korea’s credibility (as perceived by North Korea), PS, is also a critical factor in deterrence calculations. Some noticeable failures in the South Korean military in recent times, which contribute to the lowering of PS, are noted. We have reviewed Zagare & Kilgour’s other equilibria (i.e., the Attack Equilibria and the Bluff Equilibrium).5 Deterrence always fails in the Attack Equilibria. In the case of the Bluff Equilibrium, with both Koreas lacking credibility, particular attention should be drawn to the inherent danger of an unwanted war/conflict arising out of mutual bluffing and misjudgments of each other. A scenario in which North Korea’s credibility, PN, relating to its use of nuclear weapons could be genuinely high is also mentioned.

Chapter 4 introduces the Unilateral Deterrence Game in which South Korea, a defender, continues to preserve peace and stability while North Korea, a challenger, seeks to defeat South Korea. This is an asymmetric game. Once again, our main focus is on deterrence equilibrium and, in particular, on the Certain Deterrence Equilibrium among all solutions found by Zagare & Kilgour.6 As a way of increasing North Korea’s utility for the status quo, NSQ, South Korea must avoid funding, in effect, Kim Jong-un and his trusted super-elites’ luxurious lifestyles in Pyongyang. Money can be easily funneled to support North Korea’s nuclear weapons and ballistic missile programs, which undermines deterrence. NSQ is not to be over-trusted as it can change overnight. Instead, our efforts should be focused on decreasing NDD+. Strengthening both active and passive defense lowers NDD+ and, in particular, the U.S. THAAD anti-missile defense system must be upgraded and integrated with the Patriot systems in operation without delay. Despite recent disputes between South Korea and Japan, both countries share the same core values – freedom, democracy, respect for human rights and the rule of law. They must work closely to face up to North Korea’s challenges and beyond. As for increasing PS, South Korean military’s new rules of engagement, empowering frontline commanders to order retaliation swiftly, serves as a good example of strengthening deterrence.

Among other solutions (the Attack Equilibrium, the Bluff Equilibrium and the Separating Equilibrium), the Bluff Equilibrium is particularly noted for its inherent advantage for the defender (i.e., South Korea). The incident of August 20, 2015, in which North Korea exchanged fire with South Korea over loudspeaker, is viewed from this perspective.

In the concluding chapter, the importance of maintaining high credibility, PS, is stressed again as many deterrence failures can be traced to low PS. In Perfect Deterrence Theory, being capable is necessary (but not sufficient) for deterrence to hold. South Korea is not capable of competing against North Korea in the nuclear arena. As the country totally depends on U.S. extended (nuclear) deterrence to defend against the growing North Korean nuclear threat, the U.S. needs to provide concrete assurance to its allies in this region.
 

Table of Contents

 
-Executive Summary
1. Overview of Perfect Deterrence Theory
2. Basic concepts in Perfect Deterrence Theory
   2.1 Capability and Credibility
   2.2 Type Soft, Type Hard and Incomplete Information
3. Implications of the Generalized Mutual Deterrence Game
   3.1 The Sure-Thing Deterrence Equilibrium
   3.2 The Attack Equilibria and the Bluff Equilibrium
4. Implications of the Unilateral Deterrence Game
   4.1 Deterrence Equilibrium (Certain Deterrence and Steadfast Deterrence)
   4.2 The Attack Equilibrium and the Bluff Equilibrium
5. Conclusion
Appendix

 

The views expressed herein are solely those of the authors and do not reflect those of the Asan Institute for Policy Studies.

  • 1. “Kim Jong-un calls for greater ‘nuclear war deterrence,’” The Korea Herald, 24th May 2020. http://www.koreaherald.com/view.php?ud=20200524000204
  • 2. This author is solely responsible for any errors of fact or misinterpretation of Perfect Deterrence Theory.
  • 3. Frank C. Zagare & D. Marc Kilgour, “Perfect Deterrence,” Cambridge University Press, 2000.
  • 4. ‘Direct Deterrence’ essentially describes a (strategic) situation in which two players face off against each other whereas ‘Extended Deterrence’ describes a (strategic) situation in which one player (defender) is trying to protect its protégé against the other player (challenger).
  • 5. See Appendix 4 of 3 for detailed derivations of these equilibria which are grouped into Class 1, Class 2A, Class 2B and Class 3. Class 1 includes the Sure-Thing Deterrence Equilibrium which preserves the status quo. Besides this, it has the Separating Equilibrium and the Hybrid Equilibrium. See also Table 1 in Appendix at the end of this report. Note that Class 2A and Class 2B correspond to Class 2N and Class 2S respectively.
  • 6. See Appendix 5 of 3 for detailed derivations of these equilibria which are grouped into Certain Deterrence & Steadfast Deterrence, Separating Equilibrium, Bluff Equilibrium and Attack Equilibrium. See also Table 2 in Appendix at the end of this report.

About Experts

Kim Chong Woo
Kim Chong Woo

Center for Quantitative Research

Dr. KIM Chong Woo is a senior fellow of the Center for Quantitative Research at the Asan Institute for Policy Studies. Previously, Dr. Kim was an analyst working on choice modeling and valuation at RAND Europe. He was also a senior TCAD engineer at the Samsung Semiconductor Research and Development Center and a Java application developer at PCMS-Datafit in the United Kingdom. Dr. Kim's research includes the estimation and application of discrete choice modeling, stated preference analysis, valuing public services and non-market goods; and SP model development in the transport, health, communication and utilities sector. His publications include "Security at What Cost? Quantifying Individuals’ Trade-offs between Privacy, Liberty and Security,” RAND Report (2010) and “Modeling Demand for Long-Distance Travelers in Great Britain: Stated preference surveys to support the modeling of demand for high speed rail”, RAND Report (2011). Dr. Kim received his B.Sc. in mathematics from the University of London and his Ph.D. in mathematical physics from Imperial College of Science, Technology and Medicine, London. He also holds a post-graduate Diploma in Computer Science from the University of Cambridge.