Conflict with Private Information and Incentives to Misrepresent Flashcards
- Explain disagreements about relative power using the PFF and single diagram on page 10 & 11
The rational overestimation of the payoffs to war (either higher than expected returns or higher than expected probabilities of winning), and the rational underestimation of an opponents willingness to fight. Both, in a sense, point to the same problem of mis-estimating the expected outcome of pursuing a particular aggressive strategy. Fearon believes neither of these alone is sufficient as an explanation of war, but that with other conditions they might be. In the first case, the problem boils down to two rational states believing they can both win. This case is equivalent to Anderton and Carter’s inconsistent expectations case (see p. 184 illustration).
Ae indifference curve is vertical because player A only cares about its own income, and vice-versa for player B on indifference curve Be
Player A would thus only accept distributions to the right of its vertical indifference curve, while Player B would thus only accept distributions above its indifference curve.
Whenever their two indifference curves intersect within the PPF then you know there is a region for mutual gain and includes a bargaining range that could prevent war – but in the case below, the settlement range is outside the PPF making it unfeasible.
In the above diagram, A expects to get AEmin if there is a war, even if there is some destruction as represented by the shift in of the PPF (though one source of overestimating gains is to underestimate the costs of war’s destruction). Similarly, B expects to get BE min. Neither will accept a peaceful settlement that gives them less than this amount, which jointly exceeds even what could be available from the PPF in peace. So in this case there is no Pareto superior and feasible peaceful division that would satisfy both A and B.
In an expected utility sense, the sum of the two sides’ expected returns from war exceed the ex ante amount to be divided between them (eg. They both expect 60 percent of the total amount of wealth initially available). But how could both sides believe this and be rational? More explicitly, if one side really thought that it would get 60 percent of the total initial resources that its opponent would get 20 percent, with 20 percent being destroyed, it would offer its opponent any amount between 20 and forty percent and expect the enemy to agree. If the enemy does not agree, and no mutual agreement can be reached, and thus both sides are clearly willing to go to war, then the two sides should also then know that there is conflict in their estimations of the expected outcome. The sides cannot be simply bluffing. In this case, a sharing of information should lead to a reappraisal by both sides of the expected outcomes, until an ex ante agreement can be reached and war avoided. But why are the sides not sharing information or misrepresenting private information
The presence of private (and thought to be superior) information may lead to inconsistent expectations
War due to the miscalculation of an opponent’s willingness to fight
A slightly different take on the same problem is a miscalculation of an opponent’s willingness to fight. This explanation might be portrayed as incompatible information about each side’s willingness to fight, for example due to private information about each side’s evaluation of the costs of war. If the information could be shared credibly then war can be avoided. The problem is that the sides have private information and have an incentive not to share it accurately.
The cases Fearon cites provide an obvious example: I will annex this part if your territory, will you fight if I do? The obvious response for the recipient of the threat is to say “Yes” and to signal a forceful response, regardless of its true intentions. Fearon suggests that this incentive to deceive may be reduced if the signal is itself costly to send (eg. mobilizing for war to send a signal of willingness to fight. At the time of the First World War, mobilization was very expensive and quite slow).
This information requirement introduces a second level of complexity to the basic argument that two rational sides, each seeing their willingness to fight, must be able to share information about outcome probabilities and values to identify a Pareto superior contract space. The cost of the signal can be factored into this calculation, i.e. each side would form beliefs about the cost of the signal, and expect their opponent to send costly signals up to the point at which the signal was as costly as the war itself.
Rationalist explanations for misrepresenting private information
An exchange of private information between players could generate a peaceful settlement that would be preferred to fighting. However, because expected outcomes determine which settlements are acceptable, the players have an incentive to withhold, and misrepresent certain information in order to attain a settlement more to their own advantage:
The Japanese had private information about relative military capabilities, strategy, and tactics of which the Russians were unaware. Why would Japan not share this information in order to solicit a more favorable peaceful settlement from Russia?
If Japan revealed their hidden strengths, then Russia would have taken countermeasures to diminish or even eliminate the Japanese advantage.
Japan’s claims about its abilities might cause the Russians to believe that the Japanese were simply manipulating information to extract a more favorable settlement leading the Russians to deem the information not credible.
In relation to credibility point above: Since incentives to misrepresent military strength can undermine diplomatic signaling, states may be forced to use war as a credible means to reveal private information about their military capabilities – demonstrations sometimes fall close to war until you really end up at war – once you mobilize you’re at the expense of mobilization you’re basically paying for the cost of war so it’s a pre-commitment that’s hard to go back on and you mind as well just go to war
Reputation also matters: Private information about the costs of fighting or the value leaders place on international interests can give them an incentive to cultivate a reputation for having lower costs or more far-flung vital interests than they actually do. If cutting a deal in one dispute would lead other states to conclude the leader’s costs for using force are high, then the leader might choose a costly war rather than suffer the depredations that might follow from making concession
Implications that incentives to misrepresent private information has on conflict management (3 in total) and show how this affects the PPF
Option 1: Aid or buying them off, the idea would be a party would come in and say if you don’t come to war, we will provide aid or resources which would cause the PPF to shift outwards because it would introduce new production capabilities and would thus create a new bargaining range as seen below. The problem with this is that whenever you want to get resources or funds two sides can just pretend to go to war when they’re not actually planning to go to war, also it’s expensive and I might not have enough resources to adopt this solution every time.
Option 2: You would say that there’s some sort of punishment if you end up going to war – so you initially calculated that the cost of war was at some point but now the cost of war increased because there are also sanctions or other deterrence mechanisms which make war more costly. This makes the benefits of war lower, so Aa would move left and Bb would move down, and there would now be a range within the PPF for a possible settlement
Option 3: A biased third party would come and say to player B we looked at their troops and we looked at your troops and we determined that you’re both wrong and it would force them somewhere within the PPF – biased because let’s say Turkey told Azerbaijan that’s biased information that is more credible because your getting advise from someone you trust rather than some third-party neutral side. The information is thus then more credible.
