target concessions in the shadow of intervention

Target Concessions in the Shadow of InterventionAuthor(s): Amy YuenSource: The Journal of Conflict Resolution, Vol. 53, No. 5 (OCTOBER 2009), pp. 745-773Published by: Sage Publications, Inc.Stable URL: http://www.jstor.org/stable/20684613 .

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Target Concessions in the Shadow of Intervention

Journal of Conflict Resolution Volume 53 Number 5

October 2009 745-773 ? 2009 The Author(s)

10.1177/0022002709339046

http://jcr.sagepub.com

Amy Yuen

Department of Political Science

Middlebury College, Middlebury, VT

Why do targets sometimes make concessions when third parties offer assistance? Both

the extended deterrence and alliance literatures point to unreliable third parties to

explain deterrence failure and target acquiescence. On the other hand, the alliance

literature also suggests that third parties present a moral-hazard situation in which tar

gets will behave less prudently when they have outside support. Without dismissing the importance of these dynamics, I demonstrate that targets will still make conces

sions when intervention is certain, and that interveners do not always embolden tar

gets in crisis situations. Counterintuitively, interveners alter the bargaining situation,

shifting the bargaining space so that conceding is more attractive than war for the

target state. Instead of emboldening targets, third parties deter larger demands and

produce settlement outcomes that reduce the burden on the target.

Keywords: third-party intervention; bargaining; moral hazard; deterrence; formal model

Why

do targets sometimes make concessions when powerful third parties offer assistance? Conventional wisdom suggests that interveners will embolden

prot?g?s to fight in situations that they otherwise would not. Consider the current conflict in Sudan. Alan Kuperman published a controversial op-ed in the New York Times in 2006 suggesting that intervention in Darfur was emboldening the rebels to

fight on, pointing to the fact that the rebels who benefited from intervention

rejected the proposed agreement, not the Sudanese government.1 While Kuper man's case is an intrastate conflict, emboldening dynamics have also appeared in the interstate conflict literature, particularly in studies of alliances. Does interven tion lead to riskier behavior? A brief example suggests the situation is more com

plicated. In 1939, Finland and the Soviet Union began fighting what became known as the Winter War in which the Soviet Union attempted to make gains within Finnish territory to fortify itself against invasion by Nazi Germany. The war was bilateral, but offers of aid were sent to Finland after the war broke out from

Author's Note: I thank Terry Chapman, Scott Wolford, Cliff Carrubba, Dan Reiter, Eric Reinhardt, Susan Allen, Suzanne Werner, Marc Kilgour, and Alex Weisiger for their helpful comments and sugges tions on this article.

745



746 Journal of Conflict Resolution

very interested and capable nations, mainly France and Great Britain. Finland ser

iously considered accepting intervention; however, the war ended with a bilateral settlement rather than becoming a multilateral war. How do we explain this beha vior? Why would Finland refuse assistance when it had already committed to fight ing alone? Some may point to the issue of intervener credibility as the key to Finland's decision not to accept the aid, but I offer additional, plausible explana tions for this particular puzzle.

The article proceeds as follows. First, I briefly review the traditional and extended deterrence models as well as the newer versions, which incorporate bar

gains and target states separately. These models have moved the extended deter rence model beyond dichotomous choice models and beyond the two-actor

specification, but they have not combined these characteristics. Next, I consider the alliance literature as it relates to strategic decision making and outcomes. Finally, I discuss the small theoretical literature on appeasement in a bilateral context, which

provides rational explanations for appeasement behaviors and are closely related to

target concessions but do not consider the effects interveners have on the process. Second, I present a simple, formal model that includes bargaining dynamics and

a strategic target, the third important actor in any conflict involving potential inter vention. The results of this model show that interveners actually generate better conditions for target concessions when they threaten to enter the conflict. Under conditions of uncertainty, aggressors often reduce demands to hedge their bets

against intervention, but this opens the opportunity for the target state to accede to the aggressor's demands in lieu of fighting because the target does not have to give over the larger value of goods. Target concessions occur because fighting is not worth the alternative revised demands and peace. Thus, a third party can induce

peace in ways previously unacknowledged, by creating conditions for settlement rather than aggressor capitulation as a way to prevent the onset or continuation of violence. I discuss some empirical implications of the model and demonstrate these

dynamics with illustrative case studies.

Deterrence Dynamics

Many scholars use the concept of deterrence to explain how third parties could

potentially prevent aggression against targeted states. The notion is familiar: "deter another party from doing something by the implicit or explicit threat of applying some sanction if the forbidden act is performed" (Snyder 1961, 9). As applied to the extended deterrence context, the potential intervener issues the threat of retalia tion rather than the targeted state itself.

Growing out of the nuclear deterrence literature, the credibility of intervention is the single most cited factor explaining why targets (prot?g?) may or may not find themselves under attack in a crisis situation. Does the aggressor believe she will face a target and supporting intervener if she proceeds beyond issuing a threat? The



Yuen / Target Concessions 747

extended deterrence literature highlights the uncertainty surrounding intervener

capabilities and commitment and naturally settles there to explain the success and failure of deterrence. From this point, the strategic dynamic appears well estab

lished, and much of the empirical literature turns to various measures of military capability and indicators of commitment that may clue an aggressor in to the inten tions and preparedness of a third party (Russett 1963; George and Smoke 1974;

Huth and Russett 1984; Huth 1988a, 1998b; Zagare and Kilgour 2000). When used to address questions on the role of third parties in crisis bargaining, however, the standard deterrence models give an incomplete picture of the complex relationships facing belligerents and the potential third party because they ignore the strategic choices facing the target, and they almost never include the bargaining dynamics that we now consider to be characteristic of both the outbreak and continuation of war. In the recent literature, scholars characterize war as rounds of bargaining, with

fighting simply helping the belligerents to update their information and reach a suitable settlement that reflects convergent expectations over their capabilities and resolve (Blainey 1988; Fearon 1995; Reed 2003; Wagner 2000, 2007; Powell

2004; Filson and Werner 2002; Slantchev 2003). Naturally, the bilateral situation

presented in these explanations for war becomes more complicated when third par ties get involved.

How does the threat of intervention affect the bargaining dynamics between bel

ligerents? Werner (2000) provides some insight into this question, but the model suffers from the same problem of previous deterrence models in that it is a two actor bargaining situation. Werner's innovation provides a bargaining setup in which the aggressor issues a demand, and the intervener must then decide whether he wants to fight or leave the target to fight alone. She demonstrates that the aggres sor can deter intervention by anticipating what kind of demands the intervener would not be willing to fight over and limiting the conflict to a bilateral war with the target state. Endogenizing demands opens the realm of possibilities for explain ing how threats to intervene can alter bargaining dynamics.

Alliances and the Moral Hazard Problem

Understanding the outcomes of crises involving two belligerents and an interve ner naturally calls for three strategic actors, not just two. Do targets play an impor tant role in crises involving a potential intervener? The alliance literature takes up questions of three-actor crisis behavior, considering alignment patterns, alliance

reliability and the effects an alliance has on the behavior of aggressors and targets (Smith 1996; Morrow 1994; Powell 1999).

More specific to the role the target plays in the interaction, Zagare and Kilgour (2003) suggest that targets do have some leverage over the decision-making pro cess in a crisis. Assuming incomplete information between target and intervener, they demonstrate that the intervener must send two separate signals, one of




deterrence to the aggressor and of restraint to the target. Furthermore, they must

successfully signal intentions knowing that the target may realign with the

aggressor against the intervener, demonstrating that a different realignment dilemma exists in crises.

Others suggest that choosing the target is a strategic decision in itself. Gartner and Siverson (1996) argue that aggressors choose who they challenge with an eye toward selecting more vulnerable targets. Quackenbush (2006) applies this notion to an aggressor facing a target and potential intervener. He demonstrates that the

aggressor will choose the ally that is more strongly committed to the relationship in an attempt to reduce the chances of attack by the remaining partner. Finally, Snyder and Diesing (1977), Snyder (1984), and Smith (1995) allude to the problem of moral hazards in alliance systems, while other alliance scholars suggest that alliances

spread wars rather than prevent them because they make fighting with aid more

attractive for the belligerents than fighting alone (Altfeld and Bueno de Mesquita 1979; Sabrosky 1980; Siverson and King 1980; Oren 1990; Kim 1991). Rowlands and Carment (1998) model the problem explicitly. They show that the participation of an outside intervener is likely to make the target fight harder and more intensively rather that take steps to resolve the conflict without violence. These results suggest that three-actor crisis dynamics are different from two-actor dynamics, and they point to the problem that intervention emboldens the target to fight when it otherwise would not have.

Crisis Concessions and Appeasement

In reality, many conflicts do not end in multilateral or bilateral war, or as aggres sor capitulation. In fact, the majority of crises and wars end in settlement, even when interveners tip the balance in favor of one belligerent or another. Moral hazard arguments do not explain this counterintuitive outcome. Why do some crises end in concessions and settlement? What role do interveners play in bringing this about? Target concessions are associated with appeasement, though appease

ment scholars tend to limit their analyses to the bilateral context and focus on the

longer-term tradeoffs facing potential appeasers. Furthermore, when interveners are involved, the focus of appeasement behavior is on the third party, not the target. Nonetheless, it is worth reviewing appeasement briefly.

Much of the work on appeasement has focused on reputation. Kreps and Wilson

(1982) demonstrate how, in finite repetitions and with uncertainty, appeasement can create a reputation of weakness that leads to recurrent challenges.2 In other

words, in cases of conflict that present multiple potential challengers, the target should stand firm or else risk losing a reputation of resolve, releasing the restraint other challengers hold. Giving in to repeated demands from the same challenger ("salami tactics") also undermines a target's reputation and encourages the chal

lenger to make increasing demands as long as the target continues to acquiesce




(Schelling 1966). These arguments suggest that standing firm early in the interac

tion, while costly in the short term, can prevent the target from losing everything in the long run, making appeasement appear much more costly than standing firm as a

policy. More recently, however, Powell (1996) suggests that appeasement can be rational if the appeaser believes her opponent is likely to be satisfied within a rea

sonable number of rounds such that the aggregate costs of appeasement are lower than the costs of war. Furthermore, Treisman (2004) shows that for strong targets, it is less costly to appease early on because they reserve resources to deter chal

lenges from the second rather than spend them fighting the first challenger, given

multiple challengers and resource constraints. Rational appeasement is related to explaining concessions, but these scholars

focus more on the trade-off between immediate threats and the long-term ramifica tions rather than the external factors that influence the crisis process.3 While these

models give us some very important insights, the model presented below focuses on the relationship between costly war, immediate settlement, and the role interve ners play in that decision process.4

A Simple, Three-Actor Bargaining Model

The game proceeds as follows. The aggressor must decide how much to demand from the target, taking into account whether she is likely to get her demand without a fight or whether she will pay some cost of war that may or may not involve an

intervener. Ideally, the aggressor would get large concessions without war, but she

certainly prefers bilateral to multilateral war and may be forced to back down if the odds are against her. The target, receiving this demand and knowing whether an intervener will back him, decides to accept or reject the demand.5 The target's most

preferred outcome is the status quo, but if demands force him to fight, having third

party assistance is better than none. If the target rejects the demand, the aggressor must decide whether to carry on with the fight or simply back down. The aggressor, at this stage, has to consider whether she really thinks the intervener will alter her chances of winning enough to make backing down worthwhile or whether she will find herself fighting a bilateral war. If the aggressor chooses to fight, the intervener then chooses whether and how much to get involved. The intervener also prefers the status quo but will fight if demands alter the status quo too much. Thus there are four possible outcomes: an accepted demand, a status quo result resulting from the aggressor backing down or making no demand, bilateral war, and multilateral war. The likelihood of each of these outcomes is directly affected by the aggres sor's first decision. Working with incomplete information over the intervener's costs of war, she chooses her demand based on her expectations of what behavior will follow (see Figure 1).




Figure 1 A Strategic Model of Third-Party Intervention

Aggressor

UA{War), UT(War), U,(v)

Payoffs and Information

Working backward up the game tree, the intervener's contribution is modeled as a continuous, decreasing effect on the aggressor's chances of winning a war. If there is no intervention, the probability that the aggressor wins is p. If, however, the intervener chooses to intervene, the aggressor's chances decrease as the amount of intervention (v) increases:

pr(Awins|v* >0) = -^. (1)




If the interaction reaches the intervener's decision node, he simply maximizes his expected utility of intervention:6

m(v)=j^-v(-x*)-nv, (2)

where is the slope of the cost function.7 This slope represents an incremental increase in the costs of war for the intervener as he increases the size of his contri bution. In other words, changing the power dynamics of a crisis has relative conse

quences for the third party. To reach the intervener's node, the aggressor must prefer fighting to backing

down. The decision is complicated by her lack of information over the intervener's cost slope, n. At this stage, she has more, but still incomplete, information and a more solid grasp of the crisis situation since she has already set the stakes. If she backs down at this node, each actor receives a status quo payoff of zero. In reality, there are often costs associated with backing down, but the assumption is common in the literature and simplifies comparison.8 If she chooses to fight, then she accepts the risks of war, which constitute an estimate of the chances that the war will be multilat

eral, how much intervention to expect, and an estimate of the chances that she will be facing only the target with her original odds of winning. She has the opportunity to learn from the target's behavior at the prior node, depending on how she sets the stakes in the first node. I discuss this relationship in greater detail below.

The target has a well-informed, but difficult, decision to make. When he decides whether to accept or reject demands, he considers how much assistance he will get, if any, and weighs it against giving over demands (? x) without absorbing the costs of war. His expected utility for rejecting demands is

EUr(Reject) = (-**) - t, (3)

where t is the target's costs of war.

The aggressor's demand decision hinges on several considerations. She can

choose any demand within the range of zero to x, but certain ranges of demands are associated with different outcomes, determined by behavior down the tree. Using her limited information, she compares each of three ranges and chooses x* such that she maximizes her expected utility across each range. Recall, the aggressor does not know the true value of n. How much does each additional unit of interven tion cost the intervener? The aggressor's a priori beliefs are that ? ~E ( ).9 The

advantage to this method is that it links uncertainty over the costs of war to some

variability in the aggressor's chances of winning. Instead of focusing only on

uncertainty over costs or uncertainty over the odds of winning, the aggressor must face both since the intervener's costs factor into his contribution to the war effort. A second advantage of using an explicit distribution assumption is that it allows for testable demand predictions. How do the demands change as the aggressor's




strength or intervener's cost sensitivity increase? An implicit probability limits our

ability to isolate those comparative statics for testing. Is the relationship monotoni

cally increasing, curvilinear and concave, decreasing or flat?10 I describe the full expected utility for each range explicitly and derive the aggres

sor's cost outpoints in the following section (a denotes the aggressor's costs of war). Each cost cutpoint represents a threshold associated with a range of demands noted

by the subscripts.11 The aggressor's payoffs for each crisis outcome are as follows:

Bilateral War Payoff =px* ? a; (4)

Multilateral War Payoff = -^-

(jt *) - a; (5)

Back Down Payoff = 0; (6)

Target Concessions Payoff =x*. (7)

Behavior

To solve this game, I use a Perfect Bayesian Equilibrium concept. The aggressor chooses an endogenous *, based on her beliefs about the intervener's costs and her exogenous parameter calculations. The aggressor considers her options, divided

by cutpoints defined by the target and intervener's decisions. The first demand cut

point marks the situation in which the target will fight regardless of intervention because the demands are large enough to overcome his costs of war.

When the demands fall below xt, the dynamics between intervener and target come into play more significantly. Recall that the aggressor does not know the interve ner's actual cost slope, n, but she can calculate both the target and intervener's cri tical thresholds for rejecting and intervening, respectively. Plotting these

cutpoints as a function of jc, they cross at a single point, suggesting that for some

demands the target's threshold for war is more restrictive, but for other demands the intervener's threshold determines the change in behavior. Defining these equa tions, setting them equal, and solving for identifies the demand cutpoint at which the cutpoint, or cost sensitivity, ordering changes. Equation 9 defines the target's sensitivity, and equation 10 defines the intervener's sensitivity.

and

=px* (10)




generating a demand cutpoint, xc\

These outpoints (xc and jc,) and the special case, EUa ( * =

0) = 0, define the low,

medium, and high ranges of demands. Define:

0 < * <xc < xt < as low range demands,

0 <xc < * < xt < as medium range demands,

0 < xc < xt < * < as high range demands.

Optimal Demands

In any given situation, the low, medium, and high ranges each produce an opti mal demand within that range. The aggressor compares the expected utilities of those optimal demands and chooses the x* that produces the largest expected uti

lity. Below, I describe the behavior and expected utilities for each range and derive cost thresholds for equilibrium purposes.12

The first range is defined by 0 < < xc < xt < x.13 In this case, the aggressor can

anticipate that the target is more cost sensitive than the intervener, meaning he will

prefer to concede demands if he does not have sufficient third-party assistance. If the target rejects, then the aggressor deduces that intervention is certain, though the amount of intervention is not. The aggressor must estimate the chances that n<nt, in which case she faces multilateral war. But she may also be facing a situation in which she can get concessions if > nt:

ELU (x|0 < < xc < Xt < x) = (t-xf/px /0JC \ coo

Xe-^nlJ^__a\dn+ Xe~Xnxdn. (12) o J ht- /

Setting the integral equal to zero and solving for a produces the cost threshold for the low range of demands, defined as

2( -

)(^/(

- )2+

^ +

*L=-^-/L* x-' (13)

2^eL?1 -

l^j(x-t)V? If a < aL, the aggressor will consider the optimal demand in the low range.

The next range to consider is 0 < xc < < xt < x. In this range, the intervener is more sensitive to the costs of war than the target, so the intervener's cutpoint




determines when multilateral war occurs. The anticipated behaviors in this range are different from the low range because the amount of intervention is always enough to make the target reject demands, whereas in the low range, intervention

might be forthcoming but it may not be substantial enough to allow the target to

reject demands. If > *, then the target is alone and accepts the demands.

EU a (jc|0 < xc < < xt < ) = |P

le~Xn -

a^jdn +

j Xe~Xnxdn ( 14)

producing a cost threshold for the medium range of demands, defined as

- * _ ~ -\J0 -1_

?"=-,M _ !

-' (15)

If a < cim, the aggressor considers the optimal demand in the medium range. The final range considers those demands larger than the target's bilateral

demand threshold, xt. In these cases, the aggressor can learn nothing about the intervener from the target's behavior, but either way, she faces certain war.

EU,* (x\0 < xc < xt < < ) =

| Xe~ln ~

a^jdn +

j Xe~Xn (px

- a)dn,

which produces the cost threshold for the high range of demands, defined as

(16)

aH =

2pxe-^-^=-. (17)

If a < an, the aggressor considers the optimal demand in the high range. Even though the exact optimal demand is unidentifiable, comparing the aggres

sor's cost thresholds tells us which range the aggressor will choose. When

#l > aH* the low range threshold is the easiest to satisfy and offers the most to be gained from the optimal demand. When aM > aL, aH, the aggressor chooses in the medium range, and for an > ?l, aM, she will select demands in the high range.

Target's Decision

If a demand is issued, the target considers his acceptance payoff, ?

*, against his war payoff, if the demand is large enough for the aggressor to fight for it. Because the target has complete information, he knows if the aggressor is willing to fight for the demands at the next node. If the aggressor is not willing to fight, the

target always rejects because ? x* < 0. If the aggressor is willing to fight, then the

target will reject demands when t < t*:

,?-"-," +

'>?. (,8) 1+v* v 7




Aggressor's Fight Decision

At the aggressor's second node in which she decides whether to capitulate or

fight, she has learned that the target is willing to reject demands.14 The fact that

she observes rejection means that she can update her beliefs somewhat in certain cases.

When the aggressor selects a demand in the low range, her expected utility for

fighting at the second node is

r(t-x*)2/px* / * \

ElU (Fight|0 < < xc < xt < x) = J

Xe~Xn if^J

dn ~ <*> (19)

generating the cost threshold

{x* -t\[\ (20)

In this case, she knows that she is facing multilateral war, but she is still guessing how much intervention she faces. It may not be enough to reduce her chances of

winning sufficiently to make war too costly. WTien the aggressor chooses a demand in the medium range, her expected utility

for fighting is

EUA(Fight|0 < xc < < xt < x) =

^ Xe~Xn dn ~ a^ (21)

generating the cost threshold

2 \ j (22)

In this case, the aggressor anticipates that she is facing multilateral war. In the final case, when 0 < xc < xt <

* < , observing rejection gives the aggressor no new information,

so her expected utility is the same as equation 16. For any demand that she is not will

ing to fight for at the second node, her expected utility at the first node is zero.15

Intervention

As described above, the intervener simply maximizes his expected utility for intervention. Taking the first derivative of equation 2 with respect to v, setting

equal to zero and solving for produces the intervener's optimal contribution, v*.




When > 0, the intervener joins the fight, but if < 0, no intervention is forth

coming (v* treated as zero).

Equilibria General Deterrence

1. a > max(aL,aM??//); ? *

<0,a> ai,am,aH and beliefs: 0 < < oo; v* > 0

For significantly large costs, there are no demands the aggressor can issue that would justify the potential costs of war. Each of the three ranges produces a nega tive expected utility, which makes the aggressor worse off than simply refraining from issuing a demand. Note that the aggressor would not be willing to fight for

any of these demands, since the expected utilities for fighting are all equal to or less than their first node counterparts, so the target would always reject, regardless of the level of intervention. In this case, general deterrence prevails because the

aggressor sets the stakes at zero.

2. di >?M,?//, a<ai\ ?

x* <0; a>a? and beliefs: 0<n<nt; v* > 0 or

#m > ^L,a//, a < au', ? *

< 0; a > am and beliefs: 0 < < * ;

* > 0

A second set of conditions also produces a general deterrence outcome. The

aggressor's war costs at the outset may be small enough that a demand exists that

produces a positive expected utility at the first node but is negative at the aggres sor's second decision over whether to fight or back down. This disconnect between the aggressor's two decisions exists because at the outset, her expected utility includes the possibility that the target will give in to her demands without a fight. Once the target has rejected her demands, she faces certain war and there fore incurs the costs of war regardless. If she sets her demands too low to justify fighting the war, then she will back down from her demands. Since the target has

complete information, however, he rejects regardless of his expected war payoff because he can anticipate the aggressor's decision to back down. Because the

aggressor can anticipate this interaction from the beginning, she decides to issue no demand at the outset.16 These outcomes are consistent with Fearon (1994), in which he argues that the effects that make immediate deterrence possible are

likely to affect the general deterrence situation as well.




Multilateral War

The model also predicts war, specifically multilateral war. Because the aggres sor has complete information about the target, bilateral war never happens. In a bilateral situation, the aggressor can identify the demands that are just under the

target's threshold for fighting bilaterally. Interestingly, the aggressor never issues a demand in the high range for similar reasoning. Demands in the high range mean the aggressor faces war with certainty, while lowering demands opens the chance for the aggressor to get something without fighting (c?m is always greater than

Multilateral war happens in equilibrium under the following conditions.

3. ?l > ciM,aH, a <ai\ t <t* ; a <a? and beliefs: 0 < < nt\ * > 0

The aggressor makes a demand in the low range, but the demand is large enough that the amount of intervention offered alters the aggressor's chances of winning enough to justify the target's costs of war. Substituting for v* and rearranging Equation 18, I identify the target's demand threshold (jt,v) when v* > 0, marking the critical point between conceding and emboldening behavior.17 When jc* > xtv, the target will reject demands.

The aggressor can update her beliefs that she is facing intervention, but her esti mate of the amount of intervention is small enough that she could still reap a net

gain when the war is over.

4. ?m > < c?m\ t < t* ; a < am and beliefs: 0 < < *

; * >0

The other multilateral war outcome happens when the aggressor chooses a demand in the medium range. In this case, it is the intervener's sensitivity to the costs of war that determines behavior. If the target anticipates intervention, he will

reject the aggressor's demands. War occurs when the demands are large and the estimates of intervention are small, causing the aggressor to fight rather than back down. War only happens if the aggressor is willing to fight for the demands she issues in the beginning.

Target Concessions

5. aL > dM,ciH, a<ai\ t > t* ; a<a\ and beliefs: 0 <n <nt\ v* > 0

For some demands, however, the aggressor may be successful in her attempts to

get concessions for free. When the aggressor chooses a demand in the low range

(24)




and the amount of intervention is not large enough to alter the aggressor's chances of winning sufficiently, then the target will accept the demands if the aggressor is

willing to fight for them.

6. ?M > CiL, an, a<aM\ t> t*;a<am and beliefs: 0 <rc <n * ; v* = 0

If the aggressor chooses demands in the medium range, the target will also make concessions when intervention is not forthcoming, and the aggressor is willing to

fight. The implications of the concessions outcome are very important. The tradi

tional argument that targets concede when intervention is not forthcoming holds; however, another concessions equilibrium also surfaces. The target may make concessions to the aggressor even when he knows intervention is certain. Why does this happen? The presence of the intervener shifts the bargaining range toward zero demands because the aggressor wants to minimize the chance of intervention while maximizing the return if the target concedes. In cases where is small enough, the intervener will offer v* > 0, but with the reduced demands, the offer of intervention may not be sufficient to justify the target's costs of war, so the target opts for the "cheaper" alternative of making small concessions. In other words, the intervener induces target concessions. Furthermore, this result does not ignore instances of emboldening the target. These outcomes occur in

equilibrium when the demands are large enough and the intervener's costs are low enough to offer sufficient intervention. Thus we cannot conclude that inter vention always presents a moral-hazard situation because, at the same time, they are reducing the aggressor's demands. A range for cheaper concessions appears as well as a range for moral-hazard behavior, suggesting that intervention can

prevent fighting and encourage settlement without requiring all capitulation to be made on the aggressor's side. Furthermore, this result happens when interveners

actually prefer to fight and is not driven by any assumption that the intervener's first goal is peace. <

Proposition 1. Interveners induce target concessions by reducing demands such that even

with support, the target is better off giving in to the aggressor's demands. Interveners do not always create a moral-hazard situation in crises.

Empirical Implications

Figure 2 characterizes the equilibrium space graphically as a function of power and intervener cost slope. Each plot represents a different combination of a and t while = 1. For the weakest aggressors, general deterrence is effective, preventing a

crisis, but as her chances of winning increase, she is more willing to gamble for the free concessions and risk multilateral war. The occurrence of multilateral war is




Figure 2 The Equilibrium Space

ou

c

OD

O o

o H

C\]

? IO 0) c

O r~

CL O UT)

O

t-.2, a?.4

IlSill?l??l?

t?.4, a?.8 t-.9, a-.l

,5 1 0

Aggressor's Strength ( )

No Challenge/Back down

Bilateral War

Multilateral War

Concede Alone

Concede w/ Intervention

Equilibrium Demand

likely only for the smallest values of n, suggesting that the gamble is worthwhile. The plots also illustrate the conditions under which the target concedes with and without intervention and when targets are emboldened enough to engage in multilat eral war. In each case, there are conditions for which intervention is rational for the

intervener, but for the target, fighting is not better than accepting the terms offered

by the aggressor. Intervention does not always lead to a moral-hazard outcome.




The difference between the aggressor's costs and the target's costs has some

interesting effects on the size of the demand. First, as the aggressor's costs get lower compared to the target's costs, the demand size increases. This reflects the

fact that the target is going to be much more cost sensitive to war, so larger demands are acceptable to him. At the same time, the smaller costs for the aggres sor increase her willingness to fight if the target rejects her demands.

Proposition 2. As the aggressor gains a large cost advantage over the target, demand

amounts increase.

As the aggressor's costs increase relative to the target's costs, the power level at

which she begins issuing demands also increases. Counterintuitively, the demands

also increase in this situation. The explanation is simple. At a certain power level, her odds of winning are good enough to risk war, provided the potential payoff is

large enough.18 As her costs increase, the aggressor will refrain from challenging the target, but once she does decide to issue a demand, she issues a much larger one to compensate for the higher costs.

Proposition 3. A higher-cost aggressor will be deterred from making a demand more

often than a lower-cost aggressor, but when they do issue demands, they ask for more.

The relationship between demands and power reflects several considerations.

First, the aggressor's strength exerts a direct, increasing influence on her expected

utility. Increasing power, however, also makes the likelihood and amount of inter

vention higher because v* is increasing in p. This creates competing pressures on

the aggressor to minimize the chances of intervention while maximizing her

demands. Ultimately, demands are monotonically increasing in /?, but, as figure 3

shows, they are reduced from the bilateral demands that would have been issued in

the absence of the intervener.

Proposition 4. Aggressor demands are monotonically increasing in p.

Proposition 5. All else equal, stronger aggressors are more restrained in their demands

when facing a potential intervener than weaker aggressors.

Proposition 5 also seems counterintuitive; however, the logic is simple. Weaker

aggressors would choose smaller demands in the bilateral situation because their

costs and capabilities prevent large demands. Small demands from weak powers

produce very small or no reaction from potential interveners compared to strong

powers and large demands. Consider that the intervener wants to minimize changes to the status quo. A weaker aggressor is less likely to win, and because the aggres sor knows this, she cannot afford to ask for huge demands. Stronger aggressors are

much more likely to change the status quo, and they have the capability to demand




Figure 3 Plot of Aggressor Demands in Two Crisis Situations

CO E

a

.4 .6

Aggressor's Strength (p)

Multilateral Demand (Potential Intervener) Bilateral Demand (Target Only)

greater rewards, which is more likely to draw intervention. Absent the intervener, the aggressor can get larger demands without risking war. Thus, potential interven ers are likely to have the greatest effect on crises involving strong aggressors.19

A final implication of this model is that the credibility issue is important, but as the crisis progresses, the target, rather than the intervener, can reveal informa tion about the intervener's intentions. In regular signaling models, high-cost interveners will want to appear as low-cost interveners because if the aggressor believes the signal, the intervener can get greater demand reductions. The pro blem is that the aggressor knows the intervener has this incentive, so she trusts no signals that interveners would use for fear of reducing demands more than she has to. The intervener cannot convey meaningful information about his costs even when they really are low. How does the aggressor form estimates about the likelihood of intervention? Generally, the incomplete information problem between aggressor and intervener is assumed to be affected by things like past




interactions, exogenous characteristics of the intervener, and the characteristics of affinity or agreement between the target and intervener, all of which inform the aggressor from the beginning. These characteristics are important for divin

ing whether a war is likely to spread beyond the two principle belligerents, but the behavior of the target may also hold clues about the intentions of the interve

ner, which is revealed only after the aggressor issues demands. While actual crises are never free from information problems, aggressors might still glean some information from how targets behave. For example, a target facing threats to its existence is likely to fight to survive, revealing little information about a

potential intervener. A target willing to fight over smaller concessions, however,

may be signaling that he has credible promises of intervention and support that would otherwise not sustain a defensive posture. An example of this kind of behavior is evident in how Poland first received German demands for the city of

Danzig in March of 1939. Hitler had already taken Czechoslovakia, but Poland's

unwillingness to give up Danzig to the Germans signaled that she had guarantees from Britain to do whatever necessary to protect Polish independence. This

stopped Hitler from trying to gain Danzig without fighting and quelled the crisis for several months until Germany was prepared for outright invasion of all of Poland (Cohen 1989, 74-75).20 Target states that are unusually firm, especially over smaller issues, may be cueing that they have reliable outside support. To

further elaborate on these implications, I turn to two case studies that illustrate how intervention relates to aggressor behavior and settlement outcomes.

Strategic Acquiescence

To demonstrate the different paths to target concessions, I examine the situa tions surrounding two interwar crises, Munich and the Winter War, that share out comes but are explained by drastically different crisis conditions. I juxtapose these cases to highlight the different roles interveners play in crisis concessions and

emphasize that we observe potential interveners associated with target concessions

despite a willingness toj?in, not just in cases of intervener abandonment.

The Munich Crisis

The crisis that evolved around the Sudeten provinces of Czechoslovakia in

September of 1938 is one event that is held up as a failure of deterrence and an

embarrassment to France and Great Britain.21 While the potential interveners, par

ticularly Great Britain, certainly pursued appeasement, their involvement affected German demands, and Czechoslovakia still had a choice in the crisis.

Since the Anschluss in March of 1938, Czechoslovakian President Eduard Benes

suspected that Germany would take action against Czechoslovakia in an attempt to




broaden German power and influence. In fact, in May of 1938, German exercises near the Czech border provoked a response from Czechoslovakia. The Czech army

began mobilizing in preparation for possible invasion, a move which Benes himself claims deterred Hitler from carrying out any early invasion plans (Benes 2004, 8).22 Between May and September, however, Benes's determination to stand up to Ger

many became increasingly reliant on the promises France had given to protect Czech independence and the tacit ties to Great Britain that accompanied French

guarantees. In terms of the model, this sets the situation so that the cost sensitivity of the intervener determines whether the target accepts or rejects. With interven

tion, Czechoslovakia fights; without intervention, she concedes.

Why did Benes rest his decision on the commitment of France? General accounts say the Allies did not explore Czechoslovakia's ability to sustain or defeat a German attack seriously because they did not expect Czechoslovakia to have much chance against German invasion. French General Gamelin believed the Czechs could only maintain a stronghold against German attack if they retreated to

the fortifications protecting Moravia, leaving all of the Sudetenland, much of Bohe mia and Prague open to German invasion (A. Taylor 1961, 181-82). Telford Tay lor's account of Munich portrays the Sudeten fortifications as surprisingly strong, from the German perspective, but containing weak points that they could exploit. Furthermore, the Czechs could have matched the Germans fairly well in ground troops but had a very weak air force (T. Taylor 1979, 989-92).

These assessments, however, do not incorporate Benes's expectation that both Poland and Hungary would join Nazi efforts to piece up Czechoslovakia. Facing, not one, but three militaries on the Czech border, all with claims of ethnic popula tions suffering Czech oppression, was more than Benes thought Czechoslovakia could handle on her own. He lamented.

From the military point of view we were, on the whole, well-prepared. But we could

not face a war single-handed. Our geographical position and the moral and psycholo

gical atmosphere throughout Europe would have made such a step either a vain ges ture or an act of suicidal despair. I examined everything. What could be done once it

was clear that France and Great Britain would not help and might dissociate them

selves from us? (Benes 2004, 19-20)

Benes was convinced that without the aid of France and Britain, Czechoslovakia would certainly lose a war. He chose to surrender the Sudetenland to preserve the rest of Czechoslovakia and hoped that Britain and France would eventually see that

Germany's ambition was growing. He relied on the idea that France and Britain would have to go to war at some point, that it was a matter of time before they rea

lized how far Hitler wanted to go and that Czechoslovakia would become a sacri fice to that learning process (Benes 2004, 19, 21).




Certainly, Hitler was determined to use force if necessary because he was skep tical that intervention would not happen, but it does not answer why he did not sim

ply take Czechoslovakia all at once, as he did with Austria. Based on the invasion in March of 1939, Hitler certainly wanted all of Czechoslovakia, but there is further evidence in his military plans even prior to the Munich Crisis in 1938.

For the improvement of our politico-military position, our first objective, in the event

of being embroiled in war, must be to overthrow Czechoslovakia and Austria simulta

neously in order to remove the threat to our flank in any possible operation against the West .... If the Czechs were overthrown and a common German-Hungarian frontier

achieved, a neutral attitude on the part of Poland could be the more certainly counted on in the event of a Franco-German conflict, (excerpt from a Conference of the Reich

Chancellory, November 1937 [Lowenheim 1965, 4])23

Strategically, controlling Czechoslovakia alleviated many concerns about how Ger

many would carry out a war against stronger powers to the west. It seems clear that Hitler felt an independent power at their border that was allied with France pre sented a serious threat, and it also suggests he intended to absorb all of Czechoslo vakia to alleviate that threat. In a bilateral situation, he would very likely have invaded in October of 1938.

Hitler felt he could not simply take Czechoslovakia, however. Despite the fact that he suspected France and Britain would abandon Czechoslovakia, he sought to ensure that they would not intervene. One of his major requirements for action

against Czechoslovakia was that there must be some political justification for it, so that any action he took would seem justified. The Sudeten Germans presented just this opportunity. Hitler played on the self-determination spirit that had permeated the interwar period and stirred the Nazi Party within the Sudeten provinces. The

requirement of political justification points to his concern that outright invasion

might not be tolerated the way invasion in response to uprisings and oppression could be. Hitler also expressed his concerns over action explicitly in June of 1938 in a directive to his officers:

I shall ... only decide to take action against Czechoslovakia if, as in the case of the demilitarized zone and the entry of Austria, I am firmly convinced that France will not march and therefore Britain will not intervene either. (Lowenheim 1965, 17)24

As late as June, he revealed he would hesitate if France moved to intervene.25 On September 12, he gave a speech in Nuremberg that touched off political unrest

in the Sudeten provinces, forcing the Czech government to respond and leading to a series of rapid negotiations with Britain and France. In these talks, he limited demands to the Sudeten provinces and managed to gain much of Czechoslovakia's fortified territory without war.




In the counterfactual, it is difficult to determine what would have occurred if Hitler had sought to invade all of Czechoslovakia. Some of the British documents

suggest that even then, Britain would not engage in war for such a small nation, but France would have been in a much more difficult position in deciding whether to

honor her alliance commitments or not. Most counterfactuals consider France and Britain's actions, but perhaps the more interesting question is whether larger demands would have changed behavior and outcomes. Hitler chose not to entertain full invasion because he was concerned about French obligations to Czechoslova

kia, illustrating the model result that third parties reduce the aggressor's bargaining leverage. Limiting demands allowed Hitler to break Czechoslovakia apart and detach her from her allies. By refraining from outright invasion, Hitler masterfully circumvented French alliance commitments and paved the way to continue his

conquest.

The Winter War

The Winter War presents an interesting puzzle. Many of the histories about the conflict make reference to its "David versus Goliath" quality, in that Finland, a

small neutral nation, stood up to the Soviet Union, which had much larger troop numbers and better equipment, and could overrun Finland if she wanted to. But the

puzzle is even more intriguing because Finland was offered military assistance in her struggle against the Soviets but did not accept the offers of troops. Instead, the conflict reached a settlement in which the Finns ceded some territory to the Soviets instead of trying to push them out with the help of France and Britain. The embol

dening logic does not hold in this case. Instead, Soviet progress and anticipation of

intervention, coupled with Finland's precarious position, led to reduced demands and Finnish concessions, rather than a larger multilateral war. As it relates to the

model, this is a case in which the target's cost sensitivity determines behavior rather than the intervener's sensitivity. Finland could have been emboldened, but threats of Allied intervention opened the possibility for negotiations and settlement that proved more attractive than multilateral war.

This conflict is very different from the situation surrounding Czechoslovakia. The

prefiguring crisis negotiations over the Sudetenland took place with the potential interveners actively involved in the process from the beginning, while the negotia tions preceding the Winter War were bilateral. Offers of aid were not forthcoming during this time because the Allied powers did not expect the Soviets to undertake an assault against Finland, and in fact, they encouraged Finland to refuse Soviet demands (Nevakivi 1976, 36). The demands during the bilateral negotiations included territory on the Karelian Isthmus, islands in the Gulf of Finland (in return, Finland would receive territory above Lake Ladoga), and allowing the Soviets to lease the Hanko Peninsula. All of these were deemed necessary to protect Leningrad against German invasion, which was vulnerable from various points within Finnish




territory. In all, these demands seem small, but most within the Finnish government felt this to be a prelude to further Soviet demands, since the territory requested included Finland's Mannerheim Line of defense (Trotter 1991, 15-16). Once the

fighting began, even the British began to suspect that the Soviets would not stop once

they gained the territory in their original demands because they wanted to reach across Sweden and Norway as well (Nevakivi 1976, 44). When prefighting negotia tions began breaking down, the Soviets formed a plan to replace the Finnish govern

ment with one friendly to the Soviet Union, led by Otto Kuusinen, a Finnish communist (Roberts 2006, 48). While the Soviets may never have intended to over run Finland militarily, they tried to subvert the existing institutions, constituting a

threat to its existence as an independent, democratic state.

While the Allies did not consider intervening during negotiations or even when

the war began, several factors generated greater interest for the Allies in the first few weeks of fighting. First, the Finns were doing unexpectedly well against the Red Army. Public opinion within France and Britain had turned against the Soviet Union for its aggression, and a unique opportunity presented itself with respect to

the Allies' fight against Germany. A large portion of Germany's iron ore came

from France and Sweden. Because of the tense relations with France, the propor tion shifted further in favor of Sweden. The Winter War represented a chance to

cut off or slow the German supply of iron ore by engaging Sweden in the conflict or at least offering her guarantees of independence in case of Soviet aggression (Nevakivi 1976, 64, 67). The Allies wanted Scandinavian cooperation because of their strategic value in both resources and geography, and the war between Finland and the Soviet Union made their importance paramount.

There is a great deal to be said for adopting a forward policy in this matter in the

hopes of thereby saving Finnish independence, instead of allowing Finland to collapse and then having to intervene in worse circumstances to save Norway and Sweden. If

we do intervene there is a great deal to be said for doing so while we can still count

upon the resistance of the Finnish Army. (British Undersecretary Sir Orme Sargent [Nevakivi, 1976,71])

At this time, Finland was asking for war materials and troop aid, the former of

which they were allowed to purchase (Nevakivi 1976, 49).26 Troops were a difficult matter because the Allies themselves were fighting Germany, which limited what they could divert, and they did not want to transport troops through Norway and Sweden

without consent. But Norway and Sweden held to strict neutrality and refused to allow

troop passage to Finland across their borders because they feared being drawn into

both the Winter War and the larger European fight (Nevakivi 1976, 73). The tide turned to favor the Soviets in late January and February, and they made

advances within Finnish territory, but the conditions of the war encouraged Stalin to

consider Finnish peace overtures. If Stalin had chosen not to take advantage of these




overtures, the consequences likely would have been dire. Not only would he have to

continue a war that he had expected to last a very short time and which was stretch

ing into months, he also might have faced much larger resistance from British and French forces, as well as Finland's Scandinavian neighbors. British and French activ

ity in Norway and Sweden might have drawn Germany into the war, widening the conflict into a greater Scandinavian war for which Stalin had not planned. The oppor

tunity for settling with their current gains presented itself, and Stalin considered two

options, settle the war and focus the military efforts elsewhere or continue on and risk a major multilateral effort with lower chances of victory and align with Hitler, whom Stalin had always expected would turn on him (Roberts 2006, 51).

On January 29, Molotov signaled that the Soviets were willing to negotiate an

agreement to end the war. The Soviets abandoned their Kuusinen government plan, which represented the most invasive demands and illuminated their revised demands.

Clearly, the Soviets wanted to get as much from the Finns as possible because they asked for their original demands, and once the battle turned in their favor, began tak

ing more territory beyond what they needed for their own defense, though the Soviets did not demand the port of Petsamo nor insist on a "mutual assistance pact" as they had with the smaller Eastern European nations (Cohen 1989, 310). In March, a treaty was signed. The Soviets had gained their original negotiating demands, plus addi tional territory along the Finnish-Soviet border, but Finland remained an independent state with its own democratic government intact (Trotter 1991, 263). It is clear that the Soviets wanted to conclude as quickly as possible despite their advances because

they issued an ultimatum and strict timeline for Finland's answer. The possibility of

foreign intervention still loomed, so settling with the Finns under duress gave the Soviets their best possible outcome. As the model suggests, potential intervention shifted the bargaining range in favor of Finland, prompting the Soviets to abandon the Kuusinen plan and tolerate Finnish independence.

Why did Finland give in to Soviet demands? Clearly, the French and the British were interested in exploiting the conflict between Finland and the Soviet Union to aid their own war effort, and they were facing little opposition domestically. For

Finland, the decision to accept intervention and fight for complete victory rested on their expectations over war compared to the settlement they could extract from the Soviets. Three issues defined their war expectations: amount of Allied troops, timing, and entry into the greater European war.

Throughout discussions with France and Britain, the number of troops that would be made available to Finland varied from a low of six thousand to a high of

fifty-seven thousand (Mannerheim 1953, 385-86). Finland could not get clear troop amounts from the British and French because the allies could not agree on what

they could divert from their own war efforts. The second issue was when these forces would become available. France advocated intervening with an expedition ary force as early as mid-December, but Britain was hesitant to offer troops until

January (Nevakivi 1976, 68). The longer the Allies waited, the worse Finland's




position became. In the last days before the agreement was signed, the French and British promised forces of around fifteen thousand French and eighteen thousand British troops that would be in Finland by mid-April, followed by greater numbers

(Tanner 1957, 208). All in all, Mannerheim felt the forces would be insufficient and might not arrive in time to save Finland proper, meaning they would be fight ing from a worse position and possibly not even on Finnish territory (Tanner 1957, 211). He also saw that if Finland accepted Western troops, the European war would

spread to Scandinavia, threatening a much longer, costlier conflict and drawing in

Norway, Sweden, and possibly Germany as well. All in all, the prospect of greater war was worse than making some concessions to the Soviets while retaining Fin nish independence (Mannerheim 1952, 382).27 The question for Finland was not whether intervention would come, but when it did, what their chances were for

gaining back their losses and how much it would cost in lives and resources.

The benefits Finland gained by entertaining offers of intervention, however, can not be ignored.

As long as our army was undefeated and we possessed the trump card in the threat of

intervention by the Western Powers, it was advisable to attempt to bring the hostilities to a close. Our unbroken resistance, above everything else, gave possibilities for

terms, which would ensure the independence of our country and save us from annihi

lation. (Marshal Mannerheim [Mannerheim 1953, 365])

The Soviets were under pressure to end the conflict without overrunning Finland, since this would take time and encourage the Allied powers to get involved. The Finns managed to retain their own government, the port of Petsamo, and the free dom to make pacts with the other Scandinavian countries once the conflict was settled. Threats of intervention led to an urgent settlement in the Winter War rather than a complete Soviet invasion or forced communist regime. When faced with the

possibility of a much larger war, both Finland and the Soviet Union saw the advan

tages of settling without achieving far-reaching goals. As the model predicts, emboldening outcomes require promises of intervention to change the odds of win

ning enough so that the target's expectations over war are better than the revised demands. This did not happen in Finland, leading to settlement when conventional wisdom might expect multilateral war.28

The 2008 Crisis in Georgia The cases presented above are events for which we have a great deal of informa

tion that allows deeper analysis so many years after their occurrence. But the

dynamics described in this model occur in every crisis in which a potential inter vener makes itself known. Consider the 2008 conflict between Georgia and Russia. The fight over South Ossetia and Abkhazia stems from the separatist movements




that appeared as Georgia gained independence from the Soviet Union. Despite moves toward greater democracy after the Rose Revolution in 2003, the separatists in South Ossetia and Abkhazia refused to submit to federalism, and relations with the elected Georgian government deteriorated (King 2008).

This situation bears some resemblance to the Czechoslovakian crisis during the interwar period.29 A significant portion of the population in South Ossetia and

Abkhazia are strongly pro-Russia, just as significant portions of the Sudeten popu lation were pro-German. The Georgian government has taken steps to stem rebel

lion, sometimes resorting to coercion, much as President Benes did during the Sudeten unrest after Hitler's Nuremberg speech. The potential interveners in the crisis between Georgia and Russia are the EU and NATO, taking economic and

military roles respectively. While information is limited as this crisis unfolds, it is

reasonable to conclude that a great deal rides on how the EU and NATO decide to

apply pressure. The EU has leverage over trade arrangements with Russia, while

NATO has been considering Georgian membership in the security alliance, compli cating what actions NATO can take to diffuse the situation.

As of this writing, Russia and Georgia have agreed to a European-negotiated ceasefire, and Russia has begun withdrawing troops, but they maintain a presence in the disputed enclaves. Furthermore, questions remain about Europe's commit

ment to Georgian sovereignty as trade deals and ceasefire compliance take place

simultaneously.30 Is the EU willing and able to leverage a deal favorable to Geor

gia? Putin's willingness to withdraw suggests that the EU can exert some influence over Russia. Will NATO create a moral-hazard risk for the situation to erupt into renewed fighting or larger war? NATO's involvement has the potential to embol den Georgia into refusing modest terms, especially if NATO membership is extended to Georgia. How this crisis settles depends a great deal on what the EU and NATO ultimately decide to promise both Russia and Georgia.

Conclusion

Why do targets concede in the shadow of intervention? The traditional explana tion that interveners may not be credible certainly holds, but the presence of an inter

vener, credible or not, reduces the aggressor's demands. When the intervener is

bluffing, the target gets better settlement terms. When the intervener is not bluffing, the fact that the settlement terms may be better than the expectations over war (i.e., within the target's bargaining range) can also lead to acquiescence. Too often, deter rence models have ignored the difficult dance of negotiations. Potential interveners shift the bargaining range in the target's favor, in essence, "deterring" demands.

Empirically, this model widens the focus of the effects of intervention from the deci sion to attack to the bargaining stage. Ideally, we would be able to observe initial demands and those that come after interveners make their interests known.




Additionally, we cannot easily determine the effects of intervention simply by observing crisis outcomes. Instead, the interaction should be considered step by step, since the parameters and variables may exert competing pressures on decision

making at different steps in the crisis. For example, stronger aggressors may be more likely to win, but they are also more likely to face an intervener, causing powerful aggressors to reduce their demands more than a weaker aggressor would.

Likewise, smaller demands reduce both the chance and amount of intervention, the

target's willingness to fight, and the aggressor's willingness to attack. Threats to intervene may not increase the chances of multilateral war, but instead may

improve the chances of reaching more reasonable concessions without fighting a

costly war.

Is it always worth the risk to fight when intervention improves your chances of

victory? The Winter War case study demonstrates that it is not. Guarantees of inter vention do not guarantee victory and may prolong a costly war that wipes away the

possibility of a more acceptable settlement. This situation suggests that interveners do not always create a moral hazard. The target and aggressor realign their war thresholds. Despite the target's lower tolerance for demands, the aggressor's reac tion to threats of intervention may reduce her demands enough that she can strike a settlement with the target instead of engaging in war.

Notes

1. New York Times, May 31, 2006. See Wagner (2005) for a discussion of alternative explanations for effects attributed to moral hazard in intrastate conflict.

2. The question began with Selten (1978) when he presented the "Chain-Store Paradox," in which he demonstrates that acting tough up front is not a subgame perfect equilibrium but instead represents an

equilibrium akin to the noncredible threat.

3. In fact, Treisman (2004) defines appeasement as "a process of making unilateral concessions to

avoid conflict" in the abstract of his article, though there is a decided focus on additional challenges in

the future within the appeasement literature.

4. It has been argued convincingly elsewhere that potential interveners make an attacker's commit

ment to the current division of goods credible in war termination, lessening the problem that attackers

will ask for more later, though this rests somewhat on the credibility of the intervener as well. See

Goemans (2000). 5. This model assumes complete information between target and intervener in contrast to earlier

work that considers conditions of incomplete information between these actors. This assumption narrows

applicability to cases in which interveners are clear about their intentions toward a favored target state.

6. If the target and intervener win the war, the situation returns to the status quo position of zero.

7. There are no maximum restrictions imposed on the amount of intervention; thus, in theory, a very

strong intervener could drive the aggressor's chances of victory to zero in the limit. The cost function, however, limits this prospect. Rather than artificially restrain the theory with arbitrary limits, I allow for

this possibility and produce numerical models with conservative figures (small slope values) such that if

unlimited intervention is predicted, the flaw can be identified easily. 8. I assume the aggressor will issue a demand only if the fight stage expected utility is strictly

greater than zero, meaning any attempts to test the target are off-equilibrium path.




9. These beliefs are plausible because the distribution ranges from zero to oo. Since war is costly, the slope cannot be negative. Other distributions that fit this requirement are equally plausible.

10. While the distribution assumption is likely to drive this relationship somewhat, it is testable,

meaning we can assess whether the assumption is appropriate or not.

11. Uppercase subscripts denote thresholds for the demand choice; lowercase subscripts denote

thresholds for the attack choice.

12. Ideally, we would integrate each expected utility with respect to n, then take the first derivative

with respect to x, set equal to zero and solve for to identify the optimal jc for each range. Because the

solutions to these equations are not closed-formed, however, all maximization is done numerically, pre

cluding the derivation of explicit equations for optimal demand choices.

13. All integration is done using Mathematica 6, version 6.0.1.0. Note also that many equations include square root terms. Decisions to use the positive or negative roots were determined by graphical

plots, selecting those roots that fit best with intuition.

14. In reality, there are likely many situations in which increased demands accompany the decision

to fight; however, for the purposes of this model, I assume the demands at the second stage are fixed. In

many crisis bargaining models, the decision to fight is collapsed into the demand decision and sometimes

iterated, but to address previous deterrence models, I separate the demand and fight stages to incorporate

backing down recognizing that this specification may eliminate some cases of increasing demands at the

fight stage. 15.1 assume the aggressor issues a demand if her expected utility is strictly greater than zero.

16. This result is possible because the aggressor and target have complete information about each

other. This dynamic would be the same in an incomplete information situation, but it is likely that some

"testing of the waters" equilibria would surface in which the aggressor does issue a demand and then

backs down to see if she can get free concessions.

17. The aggressor cannot identify because she does not know the true value of n.

18.1 establish this relationship graphically because the expected utility produces an implicit solution

for *. Using numerical modeling, the figures represent several combinations of t and a to put together the relationships of a variety of parameters.

19. This dynamic requires that the intervener have reasonably large capabilities to present a plausible threat to a strong aggressor. Empirically, potential interveners have limits to their capabilities; however,

holding the intervener's total capabilities constant, the dynamic persists. 20. Note that the International Crisis Behavior dataset considers Hitler's first attempts to get Danzig

as a separate crisis from the invasion of Poland. See Brecher and Wilkenfeld (1997). 21. Previous work has attempted to classify outcomes as deterrence success or failure. Danilovic

(2001) argues that "success" and "failure" labels are inadequate, so I do not attempt to evaluate success

and failure. Instead, I focus on illustrating the model dynamics as they unfold in the historical record. 22. Benes wrote the manuscript for this volume in 1940, but it remained unpublished until 2004. The

editor of Benes's volume contradicts Benes's claim that Hitler planned to invade in May, and claims instead that Hitler had not planned invasion at that point and took offense to the Czech mobilization,

which led him to draw up plans to invade by October 1.

23. Originally published as a memorandum in Documents on German Foreign Policy, 1918-1945, Series D, vol. I, no. 19 (Washington 1949).

24. Originally published as a directive in Documents on German Foreign Policy, 1918-1945, Series

D, vol. 2, no. 282 (Washington 1949). 25. Hitler's determination to control all of Czechoslovakia and his hesitations to do so in one single

invasion are also argued and illustrated with further evidence by Weinberg (1998), see chapter 8.

26. In fact, war material was allowed to pass through Sweden, but it was required to be a commercial

transaction and done without looking as though Sweden had agreed to aid Finland (Cohen 1989, 285). 27. Ikl? (2005, 51) also interprets Finland's decision as being between settling now and a costly

global war.




28. Not long after, Finland joined the Axis powers when the Germans broke the Nazi-Soviet pact and attacked the Soviet Union. The Finns call it the Continuation War, but after pressure from the

Soviets to go beyond their peace agreement, Finland broke the treaty seeking to reclaim their territory. This is clearly not a case of repeated demands against Finland because of appeasement behavior. See

Singleton (1998). 29. Arguably, South Ossetia and Abkhazia are more independent than the Sudeten provinces were.

30. David Blair, "Britain Accused of Betraying Georgia and Handing Victory to Russia." Daily

Telegraph, October 31, 2008.

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