Credibility and Crisis Bargaining

Although scholars of international security share a skepticism for the extent to which agreements can be externally inforced, much of the extant game-theoretic work involves strong forms of commitment. We beuild on the cannonical model of crisis bargaining to gain insights about the role of two forms of commitment in bargainingthe ability to commit to a settlement and the ability to commit to end negotiations and initiate warfighting. We find that asymmetric information about disagreement payoffs, the natural assumption in crisis bargaining models, turns out to be different from asymmetric information about agreement payoffs, the natural assumption for models of bilateral trade in economics. In the case of crisis barganing models, commitment to enforce agreements comes naturally whereas commitment to end negotiatins is quite consequential. Relaxing commitment to fight results in an unraveling; In equilibrium private information is not revealed but war is avoided. This finding undermines the conclusion that Fearon (1995) has adequately provided a rationalist explanation for war, as his analysis of the ultimatum game might be better interpreted as an argument that a strong form of commitment in the presence of assymetric information results in a risk of inefficient war. Without commitment we find that a rationalist explanation for war is still absent. ∗ We thank Avi Acharya, Alex Hirsch and Matias Iaryczower for useful discussions.