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The Agency Dilemma in Crisis Decision-Making

Brandon Merrell
Abstract:

During military crises, government leaders possess private information about the likely costs and risks of escalation. Because such information is not publicly available, other domestic actors are often overly optimistic about the use of force. When hawkish constituents are willing to penalize leaders who appear unwilling to escalate, leaders face a dilemma: although they could attempt to dispel their constituents' martial enthusiasm by sharing sobering information about the expected costs of escalation, disclosing such information could also jeopardize the nation's bargaining position by exposing its relative weakness to an adversary. I present a model of this agency dilemma. In the model, citizens are able to sanction leaders who adopt unpopular policies. To ward off the penalty, leaders can share information with their constituents about the expected costs of fighting. However, such information is also made available to an international audience with whom the leader must subsequently bargain. I show that under appropriate conditions leaders will choose not to disclose their private information. Instead, they will pander to their constituents by escalating crises even when they believe that a settlement would leave their country better off than war.