A Sequential Equilibrium for the Army’s Targeted Selective Reenlistment Bonus Program

T hroughout the last century, the U.S. military has sent large numbers of its members to relatively undesirable locations throughout the world. With the advent of an all-volunteer military force, the attractiveness of choosing military service could arguably be diminished by an increased probability of being sent to such locations, adversely affecting both recruitment of new members and retention of existing members. Since 1999, the U.S. Army has been offering a bonus called the Targeted Selective Reenlistment Bonus (TSRB) to soldiers who reenlist and volunteer to be sent to undermanned, and presumably less desirable, locations. From a personnel management perspective, can location-specific bonuses, such as the Army Targeted Selective Reenlistment Bonus program, effectively boost reenlistment rates at a lower cost to the Army than across-the-board pay increases? To address this question, we first provide some backA SEQUENTIAL EQUILIBRIUM