Conflict resolution: role of strategic communication, reputation and audience costs

Özyurt, Selçuk (2011) Conflict resolution: role of strategic communication, reputation and audience costs. (Submitted)

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This paper investigates roles of strategic communication, reputation and au- dience costs in crises bargaining, which is modeled as a continuous-time war of attrition game between two players (e.g., the leaders of two states). Initially, states send (costly) messages that signal their preferences concerning negotiated versus military settlements. Once the dispute is carried to the public, at each moment a state can choose to back down, attack or escalate the crisis further. If a state backs down, its leader suffers audience costs that increase as the public confrontation proceeds. Furthermore, each state is suspected to be a commitment (an irrational) type who will never back down, which allows players to build reputation on obsti- nacy. Equilibrium analysis shows that higher sensitivity to audience costs is not always an advantage. A state that can generate higher audience costs (such as democracies) is in unfavorable position whenever the cost of attacking or the un- certainty regarding the opponent’s irrationality is high. Escalation would make war an optimal outcome even for rational players, but war is not an inevitable outcome. The model also provides a rich set of empirically testable hypotheses.

Item Type:Article
Subjects:H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
ID Code:17132
Deposited By:Selçuk Özyurt
Deposited On:14 Oct 2011 14:12
Last Modified:14 Oct 2011 14:12

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