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We consider a game-theoretic model of counterproliferation, in which a single Incumbent (holding nuclear weapons) is faced with a sequence of potential Entrants (who are considering developing and deploying a nuclear capability or other weapons of mass destruction of their own). The Incumbent can either choose to act preemptively, with certain costs, or allow the Entrants to deploy a nuclear capability, with consequent costs due to the potential for nuclear blackmail. How should each of the players decide?

The players' decisions are optimally based not only on their own cost functions (which each knows) but also on their opponent's cost structure (which is known only in probability). Entrants (other than the first) can learn something about the Incumbent's cost structure from decisions they have made in the past. It turns out that, depending on a would-be Entrant's cost structure, a record of preemption by the Incumbent can have either a deterrent or provocation effect. Understanding the basis for each of these contradictory effects is critical to designing an optimal counterproliferation strategy.

The interaction between a sophisticated player and a fictitious player is analyzed and applied to the problem of optimal enforcement. An adaptive potential offender myopically responds to the history of past enforcement. How can a sophisticated enforcement official take advantage of this behavior? Will compliance with the law be attained? Conditions under which full compliance arises is derived and the optimal cycle of enforcing and not enforcing the law is presented. Welfare is shown to be greater than if the offender was sophisticated as well.

Deterrence policies are adopted to promote stability; however, in South Asia they have worked against the notion. Instead, they have pushed the participating countries, both regional and global, into an arms race, thereby promoting regional instability. This paper therefore makes an attempt to provide narratives to explain how deterrence policies of India and Pakistan have complicated the securitization process in South Asia, and have made deterrence less unstable. In this regard, first this paper examines deterrence within a conceptual framework and the historical anecdotes that have driven both Pakistan and India into the brink of chaos. Here, we also apply Buzan and Waever’s Regional Security Complex Theory to explain the existing security complexity in the region. Next, the paper examines the deterrence policies adopted by both the nations to protect their national interests. Then the paper shows how the deterrence policies adopted by these countries have encouraged the great powers to penetrate into the region to pacify their security interests. The paper presents a cyclical dynamics to explore the interests of the regional and great powers. Finally, the paper discusses the trickle-down effect of this security complexity on regional stability, followed by actionable recommendations and a conclusion.

This chapter provides a comprehensive discussion of the deterrence properties of a competition policy regime. On the basis of the economic theory of law enforcement, we identify several factors that are likely to affect its degree of deterrence: (1) sanctions and damages; (2) financial and human resources; (3) powers during the investigation; (4) quality of the law; (5) independence; and (6) separation of powers. We then discuss how to measure deterrence. We review the literature that uses surveys to solicit direct information on changes in the behavior of firms due to the threats posed by the enforcement of antitrust rules, and the literature based on the analysis of hard data. Finally, we argue that the most challenging task both theoretically and empirically is how to distinguish between “good” and “bad” deterrence.