The lingering threat of war between two nations is unsettling, especially if both sides understand the consequences of their actions.  A particular example of this is the Cold War, the power struggle between the US and the Soviet Union over nuclear arms, among other things.  In the article(see link at bottom of post), game theory was applied to the handling of the tension between both nations.  During the Nixon presidency, Henry Kissinger believed in applying the madman theory, or Giant Lance, to dissuade the Soviets from using their weapons.  The madman theory postulates that if you convince your opponent of committing an act of insanity, such as dropping an atomic bomb, the opposing side will back out of the conflict.  This approach is similar to the prisoner’s dilemma.  Consider two people chained together by the ankle at the edge of a cliff.  There is considerable risk that one person will want to jump off.  If one person yells to try to prevent the other from jumping, then both are released, and the one who remained silent receives a payoff.  The theory is that if you convince the other person you want to jump, then he or she will yell, in order to save both lives, and be released.

Nixon played the role of “out of control” president, and told his chief of staff, H.R. Haldeman, “I want the North Vietnamese to believe that I’ve reached the point that I might do anything to stop the war.  We’ll just slip the word to them for God’s sake, you know Nixon is obsessed about communism.  We can’t restrain him when he is angry-and he has his hand on the nuclear button.” Nixon’s insanity even lead him to multiple meetings with the Soviet ambassador to the US, Anatoly Dobrynin, who was quite alarmed by the situation.  Dobrynin claimed that military force doesn’t accomplish much good, and that Nixon should reconsider less futile options.

link - http://www.wired.com/politics/security/magazine/16-03/ff_nuclearwar