Strategic Signalling and Coercive Bargaining:

Putin's Game Theory Playbook in the European Security Landscape

Abstract This article explores Russia's contemporary strategic posture through the analytical lens of game theory, focusing on the multidimensional conflict involving Ukraine, NATO, and the European Union. In particular, it investigates the recent Russian military buildup along Finland's eastern border as part of President Vladimir Putin's broader coercive diplomacy and strategic signalling approach. The paper considers whether such manoeuvres are intended to threaten escalation against a NATO state to unsettle the alliance and shift the terms of negotiation regarding Ukraine. Using the foundational concepts of the Prisoner's Dilemma, signalling games, and brinkmanship theory, the article analyses Putin's strategic interactions with Western actors, internal EU fractures, and the credibility of NATO's deterrence framework. A comprehensive game-theoretic framework is presented to identify the options and strategic responses available to Western policymakers.

Keywords: Game Theory, Russia, Ukraine, NATO, Signalling, Brinkmanship, EU Cohesion, Strategic Coercion, Finland, Military Buildup

1. Introduction

The ongoing Russian war against Ukraine has evolved beyond a traditional military conflict, assuming the characteristics of a strategic confrontation involving diplomacy, information warfare, and symbolic coercion. Increasingly, the behaviour of the Russian Federation under President Vladimir Putin resembles a calculated engagement in multi-level strategic games aimed at undermining NATO unity, fracturing EU cohesion, and achieving foreign policy objectives through manipulation of threat perception rather than outright kinetic dominance. This paper applies a game-theoretic lens to examine whether recent Russian troop build-ups near the Finnish border represent a further iteration of Putin's coercive diplomacy playbook: specifically, the use of strategic signalling to reshape Western decision-making and extract concessions in Ukraine by raising the spectre of NATO destabilisation.

Theoretical Framework: Game Theory and Coercive Strategy

Game theory provides a structured and formalised approach to analysing strategic interactions, particularly where the choices of one actor depend on the anticipated decisions of others. It allows analysts to model conflict and cooperation using mathematical and logical tools, enabling a deeper understanding of incentives, payoffs, and equilibrium behaviour. Game theory assumes that actors are rational and seek to maximise their utility, even under conditions of uncertainty.

A particularly illustrative case is the Prisoner's Dilemma, a canonical model in game theory. Two rational actors are suspected of a crime and interrogated separately. Each must choose whether to cooperate with the other by remaining silent or defect by betraying the other. Mutual cooperation yields a moderate sentence for both. If one defects while the other cooperates, the defector goes free while the cooperator receives the harshest sentence.

If both defect, both receive significant but lesser punishment than the unilateral cooperator. Although mutual cooperation is optimal, the dominant strategy for each individual is to defect, anticipating betrayal by the other. Hence, both end up worse off—a classic case of strategic inefficiency.

This dilemma is directly analogous to EU member states' response to Russian aggression. Although acting together maximises collective security, individual states may choose to prioritise short-term economic or political gains by defecting from a unified policy stance.

Other critical concepts include signalling games, in which players with asymmetric information send signals—through actions, rhetoric, or posturing—to influence perceptions and decision-making of others (Schelling, 1960). Brinkmanship, meanwhile, is a form of strategic escalation where one actor deliberately increases the risk of catastrophic outcomes to extract concessions (Powell, 2006).

Putin’s current posture can be understood as integrating all three frameworks: exploiting defection in Europe’s prisoner’s dilemma; using signals such as military build-ups to manipulate perception; and engaging in brinkmanship by threatening escalation without clear intention to act.

3. Strategic Fragmentation: The EU’s Prisoner’s Dilemma

One of Putin’s most effective tactics has been to exploit the coordination problems among EU member states. The recent appearance of Slovak Prime Minister Robert Fico at the May Day Parade in Moscow (2025) signalled symbolic alignment with Russia, undermining broader EU policy towards Ukraine. Similarly, Hungarian Prime Minister Viktor Orbán has persistently diluted EU sanctions and opposed military aid to Kyiv, invoking calls for "peace" that reflect Russian preferences rather than allied consensus (Krekó, 2023).

In game-theoretic terms, this behaviour resembles defection in a repeated Prisoner’s Dilemma. Although the EU’s optimal strategy involves mutual cooperation for collective security, divergent national interests, ideological preferences, and domestic political considerations incentivise unilateralism. Once individual actors defect, others are tempted to follow, leading to a suboptimal equilibrium.

This systemic vulnerability weakens the EU’s credibility as a collective actor. For Putin, the cost of inducing this fragmentation is low—often involving mere rhetorical endorsement or selective economic engagement—yet the payoff in strategic confusion and delayed decision-making is substantial.

4. Military Signalling on the Finnish Border

Recent Russian military movements along the Finnish frontier have triggered concern among NATO planners. Satellite images from SVT and Planet Labs (2025) reveal substantial infrastructure expansion and force presence at Kamenka, Petrozavodsk, Severomorsk-2, and Olenya. This includes tent encampments for up to 2,000 soldiers at Kamenka, new vehicle storage halls at Petrozavodsk, the reactivation of a previously mothballed airfield at Severomorsk-2, and increased activity of strategic bombers at Olenya.

Though Moscow initially held off on visible military countermeasures, these developments point to a calculated strategy of delayed but impactful signalling.

From a game-theoretic perspective, these deployments are costly signals—actions that, by their nature, communicate intent and capability. They may be interpreted by adversaries as credible threats precisely because they are expensive and hard to reverse. Yet, the ambiguity surrounding whether Russia intends to act or simply intimidate creates strategic uncertainty, which can paralyse decision-making.

5. Is Finland the Signal? Escalation Risk and Strategic Bluffing

The question arises: is Russia seriously preparing for military confrontation with a NATO state, or is this part of a wider signalling strategy aimed at unsettling the West? Game theory suggests the latter. In brinkmanship games, actors may manipulate risk to alter opponent expectations without actual intent to follow through (Slantchev, 2003). By threatening escalation, Putin increases the perceived cost of Western unity and may create pressure for a negotiated settlement more favourable to Russian interests in Ukraine.

The concept of strategic bluffing plays a key role here. Bluffing is a form of misrepresentation in games of incomplete information. Its effectiveness depends on plausibility, not truth. In this case, Russia may be using Finland as a symbolic target to imply NATO vulnerability. If NATO members believe that Russia might test Article 5 solidarity in a peripheral region, they may deprioritise further engagement in Ukraine to avoid broader conflict.

This creates a payoff asymmetry. The West bears the reputational and material costs of deterrence, while Russia gains leverage through threat alone. The ambiguity of intention and the plausibility of escalation become tools of coercion.

6. Strategic Options for NATO and the EU

Rather than prescribing fixed courses of action, this section outlines possible strategic options NATO and EU actors might consider in response to Russian signalling. Historical precedent reveals that strategic ambiguity and misreading signals can have disastrous consequences. Lessons from the past can help inform today’s strategic thinking.

• Ignore the signal: This option involves deliberately downplaying Russia’s military posturing near Finland. However, in the 1930s, Western powers’ failure to respond to Adolf Hitler’s remilitarisation of the Rhineland emboldened further aggression (Weinberg, 1994).

• Match the signal: Reinforcing NATO’s presence mirrors strategies from Cold War deterrence, such as NATO’s Able Archer exercises in 1983, which demonstrated readiness without direct provocation (Fischer, 1997).

• Decouple fronts: During the Cuban Missile Crisis (1962), U.S. President John F. Kennedy compartmentalised conflict zones to avoid escalation elsewhere (Allison and Zelikow, 1999).

• Reframe the narrative: During WWII, Churchill reframed Nazi aggression as a civilisational threat, a rhetorical move that solidified domestic and international resolve (Roberts, 2018).

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7. Putin’s Strategic Game – Game Theory Framework and Implications

8. Conclusion

The conflict between Russia and the West is increasingly one of strategic cognition as much as conventional confrontation. Putin's deployment of game-theoretic tactics—especially signalling, ambiguity, and fragmented escalation—has enabled him to punch above Russia’s structural weight. By orchestrating uncertainty, exploiting fissures within Western institutions, and projecting symbolic threats, Moscow attempts to shift the cost-benefit analysis of NATO and EU actors regarding Ukraine.

The military build-up along the Finnish border is best understood not as an isolated security response, but as a deliberate move in a strategic game. Whether Western actors choose to escalate, downplay, or compartmentalise this signal will determine the stability of the next equilibrium. While game theory cannot predict precise outcomes, it can illuminate the strategic logics that drive state behaviour in high-stakes, multi-actor international crises.

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