Signaling in the shadow of conflict

Stephane Wolton ()

MPRA Paper from University Library of Munich, Germany

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.

Keywords: war; plea bargain; lobbying; conflict; signaling; information (search for similar items in EconPapers)
JEL-codes: D70 D74 D80 D83 (search for similar items in EconPapers)
Date: 2018-01-12
New Economics Papers: this item is included in nep-mic
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https://mpra.ub.uni-muenchen.de/83971/8/MPRA_paper_83971.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:83922

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