The Balance of Power and the Risk of War in Crisis Bargaining

Understanding how shocks to the technology of warfighting affect the probability a conflict devolves to war is central to many aspects of security studies. In the standard crisis bargaining model, changes to war payoffs have no effect on the equilibrium probability that bargaining ends in war. This neutrality result implies that shifts in military capabilities, as well as tools of statecraft such as third-party intervention, alliances, and arming, have no effect on war onset when war is the result of bargaining failure. The empirical record of war onset seems to contradict this this observation. So can we both accept the existing empirical findings on war onset and maintain the theory that war is the result of bargaining breakdown? We show that a series of individually innocuous assumptions combine in the standard crisis bargaining model to produce this result. So while it is true that changes to the war payoffs make one player more aggressive and the other less aggressive, these effects need not balance out. We show that the exact balancing and ensuing neutrality result relies on a form of symmetry in how external shocks influence the tradeoffs between the payoffs each side derives from fighting and reaching a peaceful settlement.