A core focus of the international security literature has been how states manage uncertainty in crises and assess whether their rivals are serious about going to war. The problem, as identified by Fearon (1995), is that states have an “incentive to misrepresent” their private information and claim to be more resolved than they are in an attempt to convince their rival to concede. This can lead to war – if a country is unable to verify whether its rival is as resolved as it claims to be, then it may risk rejecting its demands rather than make an unnecessary concession.

Costly signaling theory quickly emerged as the dominant theory for understanding how states cope with private information. This theory posits that resolved states will attempt to persuade their rival that they are willing to fight to avert war. To do so, resolved states will take costly actions that they would not take if they were not determined (Fearon 1997). Most commonly, states are thought to try and demonstrate seriousness by either (i) paying sunk costs, irrevocably spending resources on the conflict, for example by paying the costs of deploying troops or (ii) accumulating audience costs, i.e. making it more costly for themselves to concede by tying their reputation or domestic political future to the issue.

Introducing Dynamic Screening

In “Dynamic Screening and International Crises,” I offer a rival framework for thinking about how states behave in crises with uncertainty. Contrary to costly signaling theory, I argue that resolved states don’t bother to convince their rivals that they are resolved. As a state’s payoff for fighting increases, it has less of an incentive to try to avoid war. Therefore, resolved states are less willing to pay sunk costs to achieve a peaceful resolution of a dispute. Conversely, it is the least resolved states that are most interested in avoiding war. It is unresolved states with low payoffs to fighting that want to secure a concession simply by paying sunk costs.

In the article, I develop a formal model that builds on the above intuition. It considers an international crisis between two countries as a war of attrition – a test of nerves where both countries in a dispute can at any time decide to (i) escalate and start a war immediately; (ii) concede; (iii) delay their decision. Both countries possess private information regarding their resolve and are uncertain about their rival’s negotiation stance and whether they would ultimately prefer to concede or fight. Consequently, countries that engage in diplomacy, i.e., wait patiently and refrain from going to war, may be rewarded with a concession. Alternatively, they may find out that diplomacy is a waste of time.

Engaging in diplomacy is not cost-free. I assume that countries are required to pay low levels of sunk costs as they wait, reflecting the costs of a leader’s attention, troop mobilizations, and any market repercussions arising from the tension. In addition, following Fearon (1994), I assume that as a crisis continues, the more a country’s reputation becomes tied to a favorable resolution of the dispute, making it more costly to concede.

How does a crisis unfold in this environment?

Three Main Results

Moderately Resolved States Devote the Most Effort to Diplomacy. The costs of participating in negotiations compel states to exit them. Resolved states face a choice: wait for a concession and pay sunk costs or go to war. The higher a resolved state’s payoff to fighting, the less worthwhile it will find waiting, and the earlier it will escalate and fight.

Unresolved states also face a choice. On the one hand, unresolved states can bluff and delay a concession in the hope that their rival is unresolved and will concede before they do. However, this is risky. Their rival might be resolved, and they might abruptly decide to start a war, not knowing that the state would have conceded in time. Faced with this risk, unresolved states with worse payoffs to fighting will choose to concede earlier. It follows that, in a crisis, moderately resolved states spend the most time negotiating.

Crisis Behavior Gradually Reveals a State’s Resolve. Recall that costly signaling theory maintained that states will try to incur costs to demonstrate resolve. Accordingly, ostentatious actions such as grand speeches or large troop mobilizations can lead to abrupt changes in belief. By contrast, dynamic screening is a theory of gradual learning. As a crisis proceeds, states can continuously update their beliefs regarding their rival and view them as more moderately resolved. After all, a state that chooses to put a lot of effort into diplomacy can’t have war be a very appealing option, or else it would have gone to war already. Similarly, a state that chooses to continue negotiating can’t be too unresolved, or it would have already conceded.

Endogenous Stalemates: The war of attrition imposes little structure on the participants, who are free to quit negotiations whenever they like. In this relatively unstructured game, the two countries chose to perpetuate the crisis forever. This happens when both sides decide that they don’t want to pay the audience costs required to concede, but also don’t want to initiate a war. If a crisis lasts long enough, both parties eventually recognize that their rival will never terminate it.

Takeaway

In my article, I proposed a novel theory for thinking about how states behave and assess resolve during international crises to rival costly signaling theory. Dynamic screening theory retains many of the expensive signaling theory’s core concepts, such as sunk costs, audience costs, and private information, but arrives at different outcomes. Namely, unlike expensive signaling theory, dynamic screening predicts that resolved states won’t bother to invest in sunk costs and audience costs. As a result, countries will perceive the choice to invest in diplomacy as a sign of hesitation and irresolution.

Noam Reich, Assistant Professor of Political Science, Yale University

https://www.journals.uchicago.edu/doi/abs/10.1086/732977?af=R