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Sanctions

Author

Listed:
  • Jonathan Eaton
  • Maxim Engers

Abstract

Sanctions are measures that one party (the sender) takes to influence the actions of another (the target). Sanctions, or the threat of sanctions, have been used, for example, by creditors to get a foreign sovereign to repay debt, or by one government to influence the human rights, trade, or foreign policies of another government. We find, in a game-theoretic framework, that, in order to extract concessions, the sender may not actually have to impose sanctions, but merely threaten to. How much the sender can extract depends on the cost of sanctions to both parties, even when they are not used in equilibrium.

Suggested Citation

  • Jonathan Eaton & Maxim Engers, 1993. "Sanctions," Boston University - Institute for Economic Development 14, Boston University, Institute for Economic Development.
    • Handle: RePEc:fth:bosecd:14
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    Cited by:

    1. is not listed on IDEAS
    2. Brian D. Wright & Kenneth M. Kletzer, 2000. "Sovereign Debt as Intertemporal Barter," American Economic Review, American Economic Association, vol. 90(3), pages 621-639, June.
    3. Maxim Engers & Jonathan Eaton, 1999. "Sanctions: Some Simple Analytics," American Economic Review, American Economic Association, vol. 89(2), pages 409-414, May.

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