This is a companion to our Prisoner’s Dilemma Everywhere series.

Bill Clinton just returned from North Korea with the two American journalists who were being held there.  Kim Jong-il got his face time with Bill and the U.S. got two citizens back without sanctions or a war.  Win-win as we say in business schools?

No, says John Bolton, former Ambassador to the U.N.  The previous stand-off was doing no-one any good.  Obviously it was bad for the U.S. but it was also bad for North Korea.  Possible sanctions might have made it hard for the goodies the elite loves to make it into North Korea.  So, the Clinton-Jong-il meeting dominates the previous situation.  But Bolton has an even better situation in mind: Jong-il simply hands over the journalists without us even giving him a face-saving meeting.  We threaten them with something (war? sanctions?) and this is enough to give them the incentive to cooperate without us having to give up anything at all.  Some might argue we are pretty close to this equilibrium as a “threat of sanctions plus Clinton visit”  amounts to gain for very little pain?

Whatever the empirical judgements are, the theory is clear – Bolton sees the game as Chicken: