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Wei_Dai comments on Thomas C. Schelling's "Strategy of Conflict" - Less Wrong
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Well, you said that it had a "good chance" of failing. I see your point if by "good chance" you meant probability close to 1. But if "good chance" is more like 50%, then it would still have been worth it. Let's say MAD had a 10% chance of failing:
Then EU(MAD) < EU(NH) if U(world destruction) < 10 U(one city destroyed).