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The authors develop a model of alliances with outside options to study burden sharing in nonbinding alliance agreements. The analysis provides an explanation for the variation in ally contributions to NATO over time and why the post--Cold War period has seen an increase in the use of coalitions of the willing. Additionally, the analysis reveals something of an initiator's disadvantage in burden sharing--the initiator of an alliance action pays a disproportionate cost of the military burden. The authors' argument provides an alternative explanation for why the United States has been consistently the largest contributor to NATO. Adapted from the source document.

The authors study the conflict mediation problem, sometimes called "shuttle diplomacy," when the mediator acts as a go-between and must gather information from the disputants. In the context of a general model of information mediation, they show that the incentive that disputants have to lie to the mediator undoes any advantage that might be gained by adding communication with a third party. In fact, the main result shows that any equilibrium outcome that is achievable through mediation is also achievable as an equilibrium outcome of a game with unmediated preplay communication. This is true even when the mediator is allowed to have arbitrary preferences or biases. The authors then test their empirical prediction on dispute management efforts between 1937 and 1985. The analysis supports the hypothesis that information mediation has no effect in environments where the mediator has no independent source of information.

The authors develop a model of alliances with outside options to study burden sharing in nonbinding alliance agreements. The analysis provides an explanation for the variation in ally contributions to NATO over time and why the post—Cold War period has seen an increase in the use of coalitions of the willing. Additionally, the analysis reveals something of an initiator's disadvantage in burden sharing—the initiator of an alliance action pays a disproportionate cost of the military burden. The authors' argument provides an alternative explanation for why the United States has been consistently the largest contributor to NATO.

Working with the definition of mutual optimism as war due to inconsistent beliefs, we formalize the mutual optimism argument to test the theory's logical validity. We find that in the class of strategic situations where mutual optimism is a necessary condition for war—i.e., where war is known to be inefficient, war only occurs if both sides prefer it to a negotiated settlement, and on the eve of conflict war is self‐evident—then there is no Bayesian‐Nash equilibrium where wars are fought because of mutual optimism. The fundamental reason that mutual optimism cannot lead to war is that if both sides are willing to fight, each side should infer that they have either underestimated the strength of the opponent or overestimated their own strength. In either case, these inferences lead to a peaceful settlement of the dispute. We also show that this result extends to situations in which there is bounded rationality and/or noncommon priors.

In a recent article in this journal, Smith and Stam (2004) call into question the usefulness and applicability of what is know as the common priors assumption in the modeling of countries' strategic behavior in international relations. While the authors of this comment acknowledge that it is possible to incorporate noncommon priors in models of politics in a mathematically consistent fashion, they do not agree with the article's claims regarding the limitations of the common priors approach, which motivate Smith and Stam's rejection of it.

Although scholars of international security share a skepticism for the extent to which agreements can be externally enforced, much existing game-theoretic work involves strong forms of commitment. Building on the canonical model of crisis bargaining, this article analyzes the role of two forms of commitment in bargaining: the ability to commit to a settlement and the ability to commit to end negotiations and initiate war fighting. The findings show that, contrary to expectations, allowing a proposer to retract their offer after learning of its acceptance does not lead to greater demands. Instead, a rational actor can be best off if he or she honors the accepted agreement in crisis bargaining, even though the act of accepting an offer changes the proposer's beliefs about the probability that an offer is acceptable. However, allowing a proposer to continue bargaining in lieu of fighting does change the dynamics of bargaining, although this effect diminishes as players become more patient. Finally, when there is no commitment to offers (or fighting after a rejected proposal), the behavior is the same as that found in the model with only renegotiation of agreements, and thus mirrors the behavior in the model in which both forms of commitment are present.

Understanding how changes to war-fighting technology influence the probability of war is central to security studies. Yet the effects of changes in the distribution of power are not obvious. All else equal, increasing a country's power makes it more aggressive when making demands or more resistant to accepting offers, but all else is not equal. Changes in power influence the behavior of both countries and can generate countervailing incentives. In this note we characterize the conditions relating changes in war payoffs to changes in the probability of bargaining failure and war. For a variety of cases the strategic effects can be entirely offsetting and no change in the probability of war results from changes in the balance of power, a result sometimes called neutrality. When this neutralization does not occur, interesting and sometimes surprising effects can persist. For example, if countries are risk averse and neutrality fails, then supporting the weaker country can reduce the probability of war rather than make war more likely, even though the weaker side will now make higher demands and reject more proposals in favor of war.

Do military alliances foster aggressive behavior in allies to the point of undermining the security goal of the alliance? Like others, we find that alliance commitments may cause moral hazard because allies do not fully internalize the costs of actions that can lead to war. But unlike others, we show that the effect of moral hazard can improve security. Moral hazard can be the driving force behind generating deterrence and avoiding costly conflict. Aggressors may refrain from initiating crises if their target enjoys additional resources from its ally and so is more willing to fight back. So rather than incurring costs, moral hazard may be the very key to deterring potential aggressors and minimizing the risk of conflict. This behavior allows alliance partners to capture a 'deterrence surplus,' which are the gains from avoiding conflict. [Reprinted by permission of Sage Publications Inc., copyright holder.]

Do military alliances foster aggressive behavior in allies to the point of undermining the security goal of the alliance? Like others, we find that alliance commitments may cause moral hazard because allies do not fully internalize the costs of actions that can lead to war. But unlike others, we show that the effect of moral hazard can improve security. Moral hazard can be the driving force behind generating deterrence and avoiding costly conflict. Aggressors may refrain from initiating crises if their target enjoys additional resources from its ally and so is more willing to fight back. So rather than incurring costs, moral hazard may be the very key to deterring potential aggressors and minimizing the risk of conflict. This behavior allows alliance partners to capture a "deterrence surplus," which are the gains from avoiding conflict.