A Reputational Model of Conflict: Why Die to Win?
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This paper considers a simple model of zero-sum conflict between two players (e.g., territorial dispute) in which costly actions (e.g., terrorism) are available to one side. We identify how reputation effects shape the outcome of such conflict. A small prior of fanatic commitment type induces the possibility of costly attack followed by withdrawal in equilibrium. The chance of withdrawal is proportional to the self-inflicted cost of attack.
Abstract
This paper considers a simple model of zero-sum conflict between two players (e.g., territorial dispute) in which costly actions (e.g., terrorism) are available to one side. We identify how reputation effects shape the outcome of such conflict. A small prior of fanatic commitment type induces the possibility of costly attack followed by withdrawal in equilibrium. The chance of withdrawal is proportional to the self-inflicted cost of attack.
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