Goliath's Curse: Coercive Threats and Asymmetric Power

Abstract

Abstract States typically issue compellent threats against considerably weaker adversaries, yet their threats often fail. Why? Expanding on a standard model of international crisis bargaining, I argue that a theory of reputation-building can help shed light on this puzzle. The model casts reputation as a strategic problem, showing that challengers issuing compellent threats have incentives to anticipate the reputation costs that target states incur when appeasing aggressors. If challengers can recognize these costs and offset them with side payments or smaller demands, then even reputation-conscious targets will acquiesce. I argue, however, that military strength contributes to information problems that make challengers more likely to underestimate their targets' reputation costs and insufficiently compensate them. In this way, military power can undermine the effectiveness of compellent threats. The logic is illustrated by the 1939 Russo-Finnish crisis, and the argument's implications for the study of coercive diplomacy are explored.