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Title:The strategy of manipulating conflict PDF Logo
Authors:Baliga, Sandeep
Sjostrom, Tomas
Issue Date:2009
Series/Report no.:Working Papers, Department of Economics, Rutgers, the State University of New Jersey 2009,06
Abstract:Two decision-makers choose hawkish or dovish actions in a conflict game with incomplete information. The decision-making can be manipulated by extremists who send publicly observed cheap-talk messages. The power of extremists depends on the nature of the underlying conflict game. If actions are strategic complements, a hawkish extremist can increase the likelihood of conflict by sending messages which trigger a fear-spiral of hawkish actions. This reduces the welfare of both decision-makers. If actions are strategic substitutes, a dovish extremist (pacifist) can send messages which cause one decision-maker to back down and become more dovish. This reduces his welfare but benefits the other decision-maker. The hawkish extremist is unable to manipulate the decision-makers if actions are strategic substitutes, and the pacifist is equally powerless if actions are strategic complements.
Subjects:global strategy
JEL:C7
Document Type:Working Paper
Appears in Collections:Working Papers, Department of Economics, Rutgers University

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