A Game-theoretic Solution to the North Korea Problem

September 29, 2017 12:30 PM

A couple of colleagues forwarded to my attention an interesting piece by University of Chicago professor Harald Uhlig. In the Chicago School tradition of making simple assumptions and rigorously following them to bizarre conclusions, he uses game theory to analyze the North Korean nuclear issue and concludes that the optimal policy consists of immediate South Korean surrender, withdrawal of US troops from the peninsula, and the conclusion of a Unified Korea-US Free Trade Agreement. Sufficed to say, with such prescriptions I doubt that Professor Uhlig will be joining the Trump NSC staff, though perhaps he could make the People's United Party candidate’s list in the next South Korean national assembly election. I think that he is serious, though I am not absolutely sure: this could be some kind of Teutonic humor that doesn’t translate well. But I’ll assume he’s serious: if he’s kidding, well, the joke’s on me.

So how does Uhlig reach such an eye-opening conclusion? First, he posits an objective function or goal of the North Korean elite: “A nice life. Not being bullied around. More power.” Then he asks how the North Korean elite can obtain these things. Well, fast-forward the development of nuclear weapons and associated missile delivery systems to shake down your neighbor and deter its ally. “Where is the money near North Korea?” Uhlig asks, “Tough question? Really?!  C’mon.” Answering his own question, “It is in South Korea, of course,” (In point of fact, Japan is a lot richer than South Korea, and has pacifist tendencies to boot, but I think that the same logic applies to both, so let’s just ignore this nitpick.)

So how to get on with the rape of South Korea? Well, one way would be to threaten them with nukes, perhaps taking out a South Korean city (along with the local US military base). But this is really unnecessary (and perhaps risky—one really cannot be certain how the US will respond to a nuclear attack on one of its forward bases). If the threat is credible, it should induce the South Koreans to surrender without a shot being fired, though a few shots may have to be fired to demonstrate that this isn’t a bluff.

But couldn’t the US pre-empt, before the North Korean develops the capacity to hit the US?  (The logic of pre-emption is laid out in Joseph DeThomas’ recent essay at 38 North.) Hmmm…on this one Uhlig obfuscates, “The generals have already told Trump that they cannot guarantee to wipe out the entire weapon arsenal of North Korea! The South Koreans already beg for Trump not to do anything! The U.S. cannot possibly throw an atomic bomb first! A pre-emptive strike will be really, really messy, millions will die! Military options must be off the table! The U.S. must seek peaceful solutions!” Really? I’ll come back to this claim in a moment.

But for the sake of argument, let’s suppose the US doesn’t pre-emptively destroy the North Korean WMD capability. So what’s the deal? Uhlig argues that “Option 1 is for South Korea to surrender to North Korea, for the US to withdraw its military bases and to make the unified Korea a preferred trading partner, in exchange for stopping their development of intercontinental missiles, and to arrange this all quickly: 2017 would be good. If the upper 10,000 in North Korea can subsequently have a peaceful life in luxury and with power, and if the US and the unified Korea both benefit from the trade agreement, there will then be little reason for Unified Korea and its rulers to fear the U.S. and vice versa, guaranteeing the not-being-bullied part.” This outcome, he argues, would be superior to a US pre-emptive strike, “Most South Koreans wouldn’t see much changes in their daily lives: after all, North Korea would want a rich South Korea, not destroy it. They can no longer vote for their leader for the next 30 years or so: oh well. It wouldn’t be so bad.”

If the weapons are basically defensive, meant to secure deterrence—then neither pre-emptive bombing nor surrender are the correct policy.

So, why do I find this piece unpersuasive? It can be criticized from “inside” the model, as well as from without. The basic issue from inside the model is that if one assumes the goal of US policymakers mirror those of their North Korean counterparts, it is not at all clear that withdrawal and surrender dominate a pre-emptive strike: the millions dead would be Koreans, and I don’t recall them entering into our utility function. In fact, if one pursues Uhlig’s backward logic, it is not clear that any South Koreans would die. The North Korean goal is survival; when the US missiles begin hitting the choice is to retaliate against South Korea and face obliteration or stand down and maintain a positive possibility of survival. North Korean surrender wins. Pre-emptive bombing doesn’t seem like such a bad play.

But the deeper criticism is the simple supposition of elite goals; the assumption of complete certainty, and the counterpart dismissal of risk; and lastly that the US is playing a simple Korean peninsula, and not a more extended, global game. All are relevant.

The first issue goes to what the North Koreans want. Over the decades there have been three broad sets of motivations attributed to them. The first, typically put forward by left-leaning commentators, is that the nukes are a “bargaining chip”—the North Koreans simply built the weapons to be bought out. As North Korean weapons development has progressed and the regime has displayed little interest in bargaining, support for this perspective appears to have waned. I suppose that from Uhlig’s perspective, getting bought out would address the obtaining a good life goal, but not address the issues of bullying and power.

The opposite perspective, typically associated with right-leaning observers is closer to Uhlig’s—the weapons are meant for conquest—but the conclusion that these analysts normally reach pushes toward sanctions and pre-emption, not surrender.

Reflecting on the experience of 2002, when the North Koreans floated the idea of a significant conventional troops demobilization, while at the same time pushing forward with missile and nuclear weapons development, reaching out to Japan from which they could expect post-colonial claims, and initiating economic reforms, I proposed a third interpretation: that the development of WMDs and their delivery systems possibly signaled the beginnings of a strategic reorientation. Recognizing that the correlation of forces was such that they were not going to unify the peninsula on their own terms for a long time if ever, the North Koreans were battening down for an extended period of peaceful coexistence. The WMDs were meant to sustain double-sided deterrence (i.e. escape from being bullied in Uhlig-speak), which achieved, would permit them to pursue better lives: releasing men from the military, engaging in reform to provide them employment, and getting money from the Japanese to keep goods on the shelves during the transition. From this perspective, the nuclear weapons were fundamentally defensive in nature, protecting the North Korean elite from bullying, helping them achieve materially more satisfying lives, while maintaining power.

If I was correct in my assessment 15 years ago, that the weapons are basically defensive, meant to secure deterrence—then neither pre-emptive bombing nor surrender are the correct policy.  The notion of asymmetric escalation, complicates but does not change this logic. The North Koreans fear invasion. The thought is that if invaded and losing a conventional war, the North Koreans could use tactical nukes defensively if they thought that the possession of nuclear armed ICBMs would deter the US from responding in kind. Such capability could facilitate the demobilization some of their gigantic military—more than 1 million troops under arms, the fourth largest army in the world, supported by a population of 25 million—while at the same time enhancing their confidence that they could deter an invasion: a more efficient, less costly route to deterrence.

The less benign interpretation is that the North Koreans would be the ones to launch the invasion; if they began to lose they would use tactical nukes, sue for peace, and threaten to strike the US, if the US and its South Korean allies did not stand down. Again, immediate capitulation is not the correct policy.

Finally, there is the issue that while North Korea may be a peninsular power, the US is a global power. Uhlig contemplates a scenario where “just to make sure they know you mean business, [North Korea drops] an atomic bomb on, hmmh, say Daegu, killing nearly 3 million people and wiping out the U.S. military base there, in one go.” But this logic could just as well be applied to the US: from the standpoint of a global superpower, using nuclear weapons against North Korea might underscore credibility. Indeed, bombing North Korea might be a relatively low-cost way to achieve this end, since no one really likes the North Koreans. And in President Donald “totally destroy” Trump, we may have just found the leader who finds this logic compelling.




I wasn't sure if I should laugh or frown.  But I guess more laughs than frown in the end.

Just wondering what makes the assumption that it wouldn't be so bad for South Koreans to give up their right to vote for 30 years or so plausible. So I suppose, given the right amount of incentives or disincentives, wokring backwards as professor Uhlig urges, Americans will also be fine with an analogous solution of 30 years of Trump, Bush, or even Obama for that matter. Who knows? Perhaps, that is an empirical question. In fact, there are some studies (https://www.nytimes.com/2016/11/29/world/americas/western-liberal-democracy.html) about how we think about democracy in more recent periods that does sound somewhat alarming but I digress.

In any case, to claim that giving up democracy for peace is something South Koreans would willingly accept (I emphasize willingly here) suggests that professor Uhlig is unintentionally (I hope) assuming there are qualitative differences between peoples across democracies, or that Americans are surely rational enough to voluntarily lay down their arms in light of an invading armada of alien motherships. Wasn't there a movie about that?

Geoffrey Fattig

Jaesung - BR Myers seems to think they would (trade peace for democracy):  


I think that is a great post (Myers is who I go to first on issues re: North Korea), but I don't quite buy his argument here - I think they would trade peace for a "confederation," whatever that means exactly, but I also think he underestimates the South Korean public's embrace of democracy.  What we have seen in the past year with the candlelight protests, and now the ongoing investigations into NIS activities under Lee Myung-bak is admirable, and sets a standard that democracies around the world can learn from.  It's really quite impressive, and I don't think South Koreans get nearly enough credit for it.

That being said, the time is coming quickly where they are going to have to choose between staying in lockstep with an increasingly belligerent US and trying to reconcile their differences with North Korea.  Moon has been trying to have it both ways so far, and he realizes that he needs to build up the SK military so that they don't have continue outsourcing security decisions to a country that is crazy enough to elect Trump (all the while taking advantage of the "world's greatest purveyor of violence" to stock up on military hardware), but at some point he's going to need to make a clear choice.

It's a fascinating dynamic to witness - South Koreans are very forceful and demanding when it comes to their own leaders, but equally meek when it comes to seeking concessions from other countries (with the exception of Japan, of course).  I just hope it doesn't end up getting them into a war because they weren't forceful enough about standing up for their own interests.   




I appreciate your comment (how are you!). I must admit my own assertion that South Koreans would not willingly accept peace on North Korean terms was something that one cannot be absolutely certain about. The confederation idea goes a long way back to the 70s when Kim Il Sung first brought it up as a way explain his idea of unificaiton. So, it would in fact be quite problematic for any South Korean government  to consider its political feasibility. Perhaps I am missing a lot of details, but I am also not sure how stable an institutional arrangement can be when it seeks to reconcile two vastly different conceptions of a unified Korea between the North and the South; a symbiosis between a personalist regime and a full-blown democacy sounds simply absurd to me.

That said, I find it difficult to imagine the South breaking away from the U.S. despite what's been going on with the current Trump administration. This is because I consider the U.S. -- not just a particular individual who gets to become president -- to be the only country that has the ability to bring about systemic or structural change throughout the internatioanl arena. Facing an increasingly revisionist North Korea, the value of the U.S.-ROK alliance would increase as well. China may also have substantial influence trhoughout the region, but I'd argue so far it only extends to bilateral or multilateral change that takes place within the system. In other words, Seoul simply has much more to lose than gain by trying to solve the North Korea problem alone.

James Schopf

As a Daegu resident, I don't find Uhlig's N. Korean nuclear attack scenario that appealing.   If the North did nuke Daegu, the U.S. might face the prospect of losing L.A. in return for upholding its credibility.  In my view, the solution to decoupling is either redeployment of tactical nuclear weapons to South Korea or developlment of a South Korean nuclear program.    A S. Korean program offers the most credible retalliatory threat against a Northern strike, but it carries economic costs associated with NPT violation, so redeployment of U.S. tactical nuclear weapons seems like a better option.

miko sloper

professor haggard wrote "If I was correct in my assessment 15 years ago, that the weapons are basically defensive, meant to secure deterrence—then neither pre-emptive bombing nor surrender are the correct policy."
i fully agree with this assessment: it is based in MAD (mutually assured destruction) which has prevented the US from attacking the USSR (and now russia) despite many military leaders' desire to do so.
once north korea showed that it has The Bomb, the US bullies cannot seriously consider an atttack. the north korean leadership has been quite specific about this, that is, this analysis is not based in idle speculation, as the Uhlig article seems to be.

what if we start a game-theory model based on more likely goals: north korea just wants to be left alone and no longer threatened. maybe north korea wants to be treated like another nation-state with normal commercial relations with other nations and so forth...
if the US were to play according to its theoretical play book, what would game theory do with FREE TRADE as the goal?

Georgy Toloraya


не могу не поделиться
I cannot resist the temptation to share the dream – or, rather, a nightmare- I have had tonight on a transcontinental flight across Eurasia- a dream about Korean unification
“ On the night of 9th of September 2017 (day of creation of DPRK, or maybe other symbolic date) those South Koreans, who are still awake at this late hour, are amazed to see a bright flash in the sky north of Seoul. This is the explosion of North Korean thermonuclear charge at the altitude of dozens or hundreds  kilometers, sending a powerful EMP (electromagnetic pulse) all across Korea. Immediately all the electronic devices go dead - from mobile phones, PCs and TVs to  cars and  strategic communications systems and electronic controls of modern South Korean and US armaments. To be on the safe side, the computer worm, long before secretly placed by North Koreans in South Korean command and control systems,  is activated to make South Korean and US military deaf and blind, and the population - unaware of what is happening. 
North Korean tanks and missile systems are of course protected against EMP, and not much of electronics is used in them anyway, while the break of North Koreans-owned gadgets is just a collateral damage.
     Unimpeded hundreds and thousands of North Korean commandos are delivered to key government and military objects in the South , communication and transportation hubs, law enforcement agencies by air (and later by ground transport across DMZ) to take control of them. Government officials, political, military , mass media , major business leaders (after all, there are just several thousands of them) are arrested and in case of  resistance killed.
   Rank-and-file South Korean military and police, demoralized and having no orders, do not resist too fiercely (South Korean soldiers are not die-hard fighters anyway).  Those who try  are killed on the spot. US bases are issued the ultimatum to surrender and disarm, and in case of disobedience would be  annihilated by a long-prepared  massive missile and cannon strikes . Anyway the limited numbers  of US military are unprepared to fight without ground support from South Korean troops and reinforcements from the outside .
    In the morning  South Korean citizens wake up to find in their backyards the leaflets (TV and radio are dead) declaring the creation of Koryo Confederate Republic  (KCR) with Kim Jong Un as its President and Commander-in-Chief. His photo smiling in the interior of Chongwadae, where he has moved in early hours of the day, is printed. Later trucks with loudspeakers roam the streets, broadcasting the first decrees of the United Korea government with capital in Seoul, as follows: 
     For the transition period of one year the curfew is imposed; later the elections will be held.  All the property of all citizens and businesses will be kept intact, apart from a small group of “national traitors”- chaebol owners, who will be tried. Deposits over 1 bln Won will be frozen and the money accrued will be used to drastically raise pensions and stipends to students. The economic system of the Southern provinces of Korea will be kept intact and will be developed on the principles of socially oriented market economy . Cooperation with North Korean economy will be fostered. The businesses and workers are urged to continue normal  economic activities. Official and managers should continue to perform their routine duties under control of North Korean commissars. The civil rights of citizens, with the exclusions of political activities, will be preserved. The law and order will be kept by North Korean special forces (maybe not so “polite men”) and the population is urged to help them fight the crimes.
     All the international treaties of ROK are null and void and US troops and foreign citizens are welcome to peacefully leave the country under control of North Korean special forces. Koryo Confederate Republic is open to establishing friendly relations with all the countries that would recognize it. KRC also is a successor state to DPRK, so the treaties concluded by DPRK   and its international obligations are valid unless revoked. However it would no longer need any alliance treaties, such as with China and won’t tolerate any attempts to dominate . Also unified Korea wishes to respect the historically established interests of USA in Asia and ready to establish normal relations  with USA on the basis of mutual respect.
    After an initial shock and heated discussion in UN of this “gross violation of international law” the capitals work out the course of action. The initial US temptation to use military force soon subsides – not only for fear of nuclear retaliation, but because all OPLANS cannot be used - they were aimed at attacking the North, and  North Korean leaders are now in Seoul, making all the Southern population hostage. Also China and Russia strongly warn against attempts for military option. Anyway not much resistance from the population to the change of power, which might be accepted as “truly nationalistic”, would be expected and an interference of USA would not be popularly welcomed. USA policymakers would also consider the benefits of using a unified Korea as  counterbalance against both China and Japan in the future.  So declaring US will “never recognize” the unified Korea and imposing sanctions on it US freezes all Korean accounts in the USA,  but the vital economic links  with South Korean industry in fact survive. 
   Japan can do nothing, apart from statements, although the  popular nationalism and demands to  revoke Article 9 and create a tangible military force (including nuclear armament) to fight Korean threat  burst out. However USA does all it can to prevent this. 
   After some procrastination Russia and China recognize, with certain criticism  of the methods, the new country and vow to keep peace and stability at their borders…

In 10 years Kim Jong Un receives the Peace Nobel prize for eliminating the last vestige of the Second World War…”

Would it make a good script?!! For a North Korean movie, maybe?


Aren't the North Koreans doing pretty much what the US did in Europe during the Cold War, deploying strategic and tactical nuclear weapons in the face of the Soviets' overwhelming conventional superiority?

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