Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/59494 
Year of Publication: 
2009
Series/Report no.: 
Working Paper No. 2009-06
Publisher: 
Rutgers University, Department of Economics, New Brunswick, NJ
Abstract: 
Two decision-makers choose hawkish or dovish actions in a conflict game with incomplete information. The decision-making can be manipulated by extremists who send publicly observed cheap-talk messages. The power of extremists depends on the nature of the underlying conflict game. If actions are strategic complements, a hawkish extremist can increase the likelihood of conflict by sending messages which trigger a fear-spiral of hawkish actions. This reduces the welfare of both decision-makers. If actions are strategic substitutes, a dovish extremist (pacifist) can send messages which cause one decision-maker to back down and become more dovish. This reduces his welfare but benefits the other decision-maker. The hawkish extremist is unable to manipulate the decision-makers if actions are strategic substitutes, and the pacifist is equally powerless if actions are strategic complements.
Subjects: 
global strategy
JEL: 
C7
Document Type: 
Working Paper

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