Rewards versus Sanctions in International Relations: A Game-Theoretic Analysis of Bluffing

Boris Brekhov

International Interactions, 2022, vol. 48, issue 1, 75-109

Abstract: I use game-theoretic models to compare a sender's expected payoff across two methods of wielding influence under asymmetric information: offering rewards and threatening sanctions. Attempts to influence the actions of another can have the perverse effect of actually encouraging the behavior that one is trying to discourage by creating incentives to bluff, which may differ across foreign policy regimes. Under a reward regime, targets can bluff to extort larger inducements. Under a sanction regime, targets can bluff to deter coercion attempts. I find that while sanctions are a weakly dominant tool of influence under complete information, rewards can be preferable under incomplete information. Specifically, the sender finds promises more beneficial than threats if she expects that (i) coercion would likely fail and (ii) her willingness to offer bribes would not get exploited by the target. I examine the United States' foreign policy reversal from punishments to inducements towards North Korea during the nuclear crisis of 1993--4 to illustrate these theoretical propositions.

Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/03050629.2021.1983565 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ginixx:v:48:y:2022:i:1:p:75-109

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GINI20

DOI: 10.1080/03050629.2021.1983565

Access Statistics for this article

International Interactions is currently edited by Michael Colaresi and Gerald Schneider

More articles in International Interactions from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().