Escalation: Dynamics of Mutual Distrust

Abstract

Arms races, predatory pricing, and conflicts occur if what A does depends upon what B does, and what B does depends upon what A does. Such a vicious cycle is the defining element of the escalation systems archetype. Escalation leads to exponential runaway. The question is whether such a system could settle. Is mutual deterrence a way to reach dynamic equilibrium? Escalation is a destructive dynamic that can lead to war or, in case of companies, to bankruptcy. Yearning for a sense of security is at the core of what happens. This is a fundamental dilemma: the more companies or nations seek security and take precautions, the more the sense of security vanishes.