In anti-ballistic missile (ABM) defence the cost-exchange ratio is the ratio of the incremental cost to the aggressor of getting one additional warhead through the defence screen, divided by the incremental cost to the defender of offsetting the additional missile.
To shoot that warhead down, the defender has to wait until it appears on radar, which typically happens only a few hundred miles from the target.
Consideration of cost-exchange ratios was influential in persuading the United States and the Soviet Union to sign the ABM Treaty.
The topic was once again a consideration in the era of the Strategic Defense Initiative, SDI or "Star Wars".
In this case the defensive weapons attacked the ICBMs before they released their warheads, reducing the exchange ratio to one, although at a very high dollar cost.