Uncertainty in Crisis Bargaining with Multiple Policy Options: A Game-Free Analysis

Abstract. We examine the relationship between private capabilities and war in a new class of crisis bargaining games. Whereas traditional models consider interactions that end in either war or a peaceful bargain, we assume actors can also engage in low-level, costly policy options that shape final political outcomes in their favor (e.g., sanctions, arming, cyberattacks). Using the tools of Bayesian mechanism design, we analyze the relationship between private information about one’s war payoff and the equilibrium outcomes of these flexible-response crisis bargaining games. In contrast with traditional models, we find that private willingness to fight may decrease probability of war or a state’s expected utility from settlement. A key factor is whether private signals of wartime strength are positively or negatively correlated with a state’s effectiveness at low-level policy responses.