Field Theory of Open and Closed Strings with Discrete Target Space

We study a $U(N)$-invariant vector+matrix chain with the color structure of a lattice gauge theory with quarks and interpret it as a theory of open andclosed strings with target space $\Z$. The string field theory is constructed as a quasiclassical expansion for the Wilson loops and lines in this model. In a particular parametrization this is a theory of two scalar massless fields defined in the half-space $\{x\in \Z , \tau >0\}$. The extra dimension $\tau$ is related to the longitudinal mode of the strings. The topology-changing string interactions are described by a local potential. The closed string interaction is nonzero only at boundary $\tau =0$ while the open string interaction falls exponentially with $\tau$.