Negotiations as a Dynamic Screening Process

• In Event: Formal Models of Diplomacy and Conflict

Abstract

I model crisis bargaining as a war of attrition where both states simultaneously make offers. The war of attrition ends either when one of the states chooses to accept an offer or chooses to terminate negotiations and utilize an outside option, escalating the crisis to war. I show that all types issue a unique sequence of offers, giving rise to a dual screening process. More resolved states with better outside options have less to gain from a concession and so choose to escalate earlier. By contrast, unresolved states with a worse outside option concede earlier so as to avoid escalation from a potentially resolved rival. The model generates novel comparative statics regarding the length of delay in diplomatic negotiations.

Author

• Noam Reich, Princeton University