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Seems to me that escalating a situation with firearms increases the chances of a gun being shot.

The counterpoint is the coldwar and the threat being more powerful to the actual gun.

People aren't nation-states who take game theory to its logical conclusion.

Why wouldn't people take game theory to its logical conclusion?

Do you believe people are rational actors?

What about criminals? What about someone who is high, drunk or coming down off of something? What about someone who is mentally ill?