Conflict Prevention by Bayesian Persuasion

25 Pages Posted: 20 Sep 2019

See all articles by Raphaela Hennigs

Raphaela Hennigs

Max Planck Institute for Tax Law and Public Finance

Date Written: September 19, 2019

Abstract

Drawing upon the Bayesian persuasion literature, I show that a mediator can provide conflicting parties strategically with information to decrease the ex-ante war probability. In a conflict between two parties with private information about military strength, the mediator generates information about each conflicting party's strength and commits to sharing the obtained information with the respective opponent. The conflicting parties can be convinced not to fight each other. The conflicting parties benefit from mediation, as the ex-ante war probability is reduced. The benefit is taken up by weak conflicting parties. This benefit is larger when war is costlier and when the war probability absent mediation is higher.

Keywords: mediation, conflict, information design, Bayesian persuasion

JEL Classification: C72, D82, D83

Suggested Citation

Hennigs, Raphaela, Conflict Prevention by Bayesian Persuasion (September 19, 2019). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2019-16, Available at SSRN: https://ssrn.com/abstract=3456545 or http://dx.doi.org/10.2139/ssrn.3456545

Raphaela Hennigs (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

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