Abstract
This note stems from Jelnov et al. (2017), which analyzed the interaction of two enemy nations– Player 1 (the weak nation) and Player 2 (the strong nation). 1 (he) wishes to develop a nuclear bomb, and 2 (she) who employs a noisy intelligence system, IS, aims to deter him. Based on the signal sent by IS, 2 decides whether to attack 1. If the precision (α) of IS is commonly known, not only 2 is strictly better off with a better quality (higher precision) IS but also is 1. In contrast, this note shows that if α is 2's private information, 1 is not necessarily better off from a more accurate IS, and 2 is only weakly better off. Moreover, the equilibrium outcome depends on 1's estimate of IS's precision (E(α)). A greater estimated precision leads to less aggressive behaviors of both players, thereby reducing the chance of a conflict.
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