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Signaling in the shadow of conflict

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  • Wolton, Stephane

Abstract

Informational asymmetries have long been recognized as one of the causes of wasteful conflicts. Signaling has been found to be an effective tool for interested parties to truthfully communicate private information. Can signaling help reduce the risk of conflict? I study this question in a model in which a Sender sends a signal about his privately known cost of conflict, a Receiver makes an offer, and the Sender decides whether or not to start a conflict. I find that when the outcomes of a conflict do not depend on previous actions such as wars where the winner gains the disputed territory, signaling does not permit any information transmission. In turn, when the outcomes of a conflict depends on the Receiver's offer, signaling can help avoid war, but only under specific conditions. In all cases, the shadow of conflict looms large and renders signaling totally or relatively ineffective in preventing conflict.

Suggested Citation

  • Wolton, Stephane, 2018. "Signaling in the shadow of conflict," MPRA Paper 83922, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:83922
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    File URL: https://mpra.ub.uni-muenchen.de/83971/8/MPRA_paper_83971.pdf
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    References listed on IDEAS

    as
    1. Johannes Hörner & Massimo Morelli & Francesco Squintani, 2015. "Mediation and Peace," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(4), pages 1483-1501.
    2. Bernardo S. Silveira, 2017. "Bargaining With Asymmetric Information: An Empirical Study of Plea Negotiations," Econometrica, Econometric Society, vol. 85, pages 419-452, March.
    3. Sandeep Baliga & Tomas Sjostrom, 2013. "Bargaining and War: A Review of Some Formal Models," Korean Economic Review, Korean Economic Association, vol. 29, pages 235-266.
    4. Mailath, George J, 1987. "Incentive Compatibility in Signaling Games with a Continuum of Types," Econometrica, Econometric Society, vol. 55(6), pages 1349-1365, November.
    5. Sandeep Baliga & Tomas Sjöström, 2004. "Arms Races and Negotiations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(2), pages 351-369.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    war; plea bargain; lobbying; conflict; signaling; information;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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