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Figure 5A in stage oneno offeneeB in stage twono offeneeA's payoffB's payoff3223The outeorne (offence; acceptance) is what is to be expectedaccording to Reinhard Selten's theory of subgame-perfectequilibrium (1975). The division of the problem inta this sequentialsubgame produces a result that B is unhappy with, but it is hard forhim to get out of this current of events. Is there a way out?Frank argues for irrationaiity and uses as example a fanner whoseland is intruded upon by another farmer' s cattle. The farmer tends toaccept this if rational, since it is costly to go to court and the damageby the offenee is limited. Only if he can feel a strong personaloffenee or a holy rage will he be ready to make the sacrifices forpunishing the offender. Frank does not think it is enough with"Smith's carrot and Darwin's stick" (Frank 1988 p 249). Justiceneeds irrationaiity. In many situations the retaliation example is veryunattractive, and both rationality and prudence will advise against iLThe only effective threat is one built upan a moral indignation that isnot rationai when considering its own inconvenience. The desiredsocial solution is obtained if A can read B's moral character andwithholds the offence.III : 18