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American Economic Review: Vol. 102 No. 6 (October 2012)

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The Strategy of Manipulating Conflict

Article Citation

Baliga, Sandeep, and Tomas Sjöström. 2012. "The Strategy of Manipulating Conflict." American Economic Review, 102(6): 2897-2922.

DOI: 10.1257/aer.102.6.2897

Abstract

Two players choose hawkish or dovish actions in a conflict game with incomplete information. An "extremist," who can either be a hawk or a dove, attempts to manipulate decision making. If actions are strategic complements, a hawkish extremist increases the likelihood of conflict, and reduces welfare, by sending a public message which triggers hawkish behavior from both players. If actions are strategic substitutes, a dovish extremist instead sends a public message which causes one player to become more dovish and the other more hawkish. A hawkish (dovish) extremist is unable to manipulate decision making if actions are strategic substitutes (complements). (JEL D74, D82)

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Authors

Baliga, Sandeep (Northwestern U)
Sjöström, Tomas (Rutgers U)

JEL Classifications

D74: Conflict; Conflict Resolution; Alliances
D82: Asymmetric and Private Information; Mechanism Design


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