Abstract
The 1956 nationalization of the Suez Canal dispute, between Egypt and an alliance between the United States (US) and Britain, is modeled and analyzed within the paradigm of a first-level hypergame in graph form. The results reveal that Britain and US encountered a strategic surprise in the dispute on account of their failure to predict Egypt's action in nationalizing the Suez Canal. The equilibrium states of the dispute are analyzed to provide insights into the types of the misperceptions that caused the conflict, the possible decision makers' reactions after observing the equilibrium states, and the sustainability of the first-level hypergame equilibria. The analysis reveals substantial motivation for the United States and Britain to intensify the dispute to recapture the Suez Canal and to improve their situation.