The carrot and stick approach to coercive diplomacy

Threats and promises lie at the heart of many interstate relationships. While the conditions under which threats are more or less likely to be successful have been extensively analyzed game theoretically, their interaction with promises is less well understood. In this essay I take the first step toward a deeper understanding of the dynamic interplay of these critical components of diplomatic exchange by examining a general game model called the Carrot and Stick Game. This game, which explicitly models one of several strategies of coercive diplomacy identified by Alexander George, is a two-person non-cooperative game that involves a Manipulator and its Target. There are four distinct types of Manipulators and four distinct types of Targets. Manipulator may or may not honor its promise or execute its threat. Depending on its preferences and beliefs about Manipulator's type, Target may or may not resist Manipulator's demand. Under complete information there are certain conditions under which a credible promise or a credible threat, used in isolation, is an inadequate crisis bargaining mechanism. As George (1991) recognizes, coercive diplomacy sometimes does not work. But when used in tandem, they are always successful, at least from the manipulating player's point of view. Deterrence, therefore, may fail even when a target's deterrent threat is credible, suggesting, once again, that contentious interstate relationships are, at once, both complex and extremely sensitive to the underlying strategic milieu.