GPS Presents: Professor William Spaniel (University of Pittsburgh) "Stand Down or Stay Ready? Cheap Talk and Credible Domestic Signaling in Security Affairs"

September 17, 2021 - 12:00pm to 1:30pm

Abstract: The credibility of many international treaties, agreements, and declarations is puzzling because assenting to them is cheap talk. This paper develops a theory of how that cheap talk can yield meaningful changes to policy by communicating information to domestic agents. I build a model where an executive has private information over how likely an agent will need to take an otherwise undesirable action. Later, the agent may receive a command to do so but does not observe whether the command is authentic. I show the executive's original cheap talk signal acts as guidance. In particular, a cutpoint equilibrium always exists where executives in sufficiently threatening security environments signal agents to stay ready, while all others signal to stand down. Agents comply with those requests afterward. Further analysis shows that such influential signals can counterintuitively raise the risk of accident and that norms or inducements to signal peaceful intentions may backfire.

4500 Wesley W. Posvar Hall