How fake news will alter foreign policy

That is the topic of my latest Bloomberg column:

Just hours after Iran’s missile strike this week on U.S.-Iraqi bases in Iraq, the Iranian government made an incredible claim: The attack, it said, had killed 80 Americans and wounded about 200, all of whom were immediately removed from the site by helicopter. U.S. officials, meanwhile, said that there were no U.S. casualties…

U.S. officials may be quite happy that Iran is claiming this “victory” without any Americans having to die. In essence, manufactured casualties may now be able to substitute for actual casualties, at least for some limited purposes.

The most likely purveyors of these fake-news casualties are the weaker sides in military conflicts. They can use fake news reports of revenge to pacify their populations. And the prouder a nation’s citizens are, the more useful such fake-news casualties will be. Fake-news casualties are also easier to fabricate in countries with censorship of the press, such as Iran.

To use the game-theoretic language of deterrence: Threats to retaliate in a painful way are now less credible because lying about retaliation is now an alternative.

Note that the U.S. does not have a comparable ability to invoke fake-news casualties….

But not all is rosy:

The possibility of fake news means that when more powerful countries wish to take action, they need to do something quite vivid and dramatic. There is no doubt — in either the U.S. or Iran — that America did in fact kill Soleimani.

All in the tradition of Thomas Schelling of course.  Solve for the equilibrium!