Biding time versus timely retreat: Asymmetric dependence, issue salience, and conflict duration

Trade-conflict studies focus on whether and how economic interdependence suppresses interstate conflict initiation. Meanwhile, formal theories of war show that conflict initiation is inherently tied to its termination. In this article, I seek to bridge the two literature by utilizing a war of attrition model to formalize the relationship between economic dependence and conflict duration. I theorize that the strategic calculation ultimately comes down to a trade-off between biding one’s time and retreating in a timely manner. In the context of economic attrition, states weigh the relative costs of suffering an additional round of economic disruption against the potential benefits of winning the disputed good. As such, economic dependence can have both coercive and informational effects and these effects are contingent upon issue salience. When the issue salience is low, the coercive effect dominates; states are more likely to quit conflicts as they suffer proportionally larger economic costs. When the issue salience is high enough, the informational effect can kick in; states are less likely to quit conflicts with increasing economic costs. I test these implications on the International Crisis Behavior (ICB) and the Militarized Interstate Dispute (MID) data, finding strong support for the informational effect and suggestive evidence for the coercive one.