Audience Costs, Information, and Credible Commitment Problems

Article

Audience Costs,Information, andCredible CommitmentProblems

Chungshik Moon1,* and Mark Souva2,*

AbstractLeaders who can accumulate audience costs can send costly signals that mayhelp alleviate information problems associated with crisis escalation. We arguethat research examining the effect of audience costs fails to appreciate thetheoretical context in which audience costs matter. Audience costs may helpalleviate information problems associated with international conflict. However,credible commitment problems are more central than information problems forsome international conflicts. Theory does not expect audience costs to matterin this context; as a result, extant tests, and many criticisms, of the effect ofaudience costs on crisis escalation are flawed. We offer a more appropriate testof the effect of audience costs on crisis escalation. Consistent with extanttheoretical arguments, we find that audience costs only reduce the likelihood ofconflict when credible commitment problems are not the dominant concernmotivating a dispute or crisis.

Keywordsaudience costs, credible commitments, crisis bargaining, information

1School of Politics and International Relations, Australian National University, Canberra, Australia2Florida State University, Tallahassee, FL, USA

* Names are listed alphabetically. All authors contributed equally to the work

Corresponding Author:

Chungshik Moon, School of Politics and International Relations, Australian National University, Haydon-

Allen Building (number 24), Acton, Canberra ACT 0200, Australia.

Email: [email protected]

Journal of Conflict Resolution2016, Vol. 60(3) 434-458

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Schultz (1999) contends that a central way to distinguish between the institutional

and informational theories of the democratic peace is to examine how targets react

to threats from democracies. According to the institutional argument, democracies

face a higher cost for war than autocracies. This higher cost reduces the credibility

of a democratic state’s threat. As a result, targets of democratic militarized threats

are unlikely to be deterred from militarily reciprocating. In contrast, informational

arguments for the democratic peace posit that democracies are better able than auto-

cracies to generate audience costs.1 This allows democratic states to generate costly

signals and reduce uncertainty about their resolve. As a result, democracies are bet-

ter at issuing credible threats and targets are less likely to reciprocate against democ-

racies. We label this latter argument the audience cost proposition.

Despite much attention, we argue that the audience cost proposition has not been

properly tested. Bargaining may fail, and serious military conflict occurs, either

because of an information problem or a credible commitment problem (Fearon

1995; Wagner 2000). The crisis bargaining model that motivates the audience cost

proposition only pertains to situations in which there may be information asymme-

tries. It does not address contexts in which there may be a credible commitment

problem. Wolford, Reiter, and Carubba (2011) demonstrate that this modeling

choice has important ramifications. Specifically, when a dispute involves both an

information and a credible commitment problem, several expectations are opposite

to the findings of information-only models (Wolford, Reiter, and Carubba 2011). In

particular, reducing uncertainty about resolve through the use of costly signals may

not reduce the likelihood of conflict escalating.

The appropriate empirical domain for testing the audience cost proposition is not

all disputes, crises, or compellent threats, but disputes, crises, or compellent threats

stemming primarily from an information problem. We conduct the first test of the

audience cost proposition that distinguishes between situations in which there is only

an information problem and situations in which there is a credible commitment prob-

lem or credible commitment and information problems. We find strong support for

the audience cost proposition when we examine militarized compellent threats

(MITs), militarized interstate disputes (MIDs), or interstate crises that likely stem

only from information asymmetries. Furthermore, we fail to find support for the

audience cost proposition when we examine MITs, MIDs, or crises that are associ-

ated with credible commitment concerns.

Our research suggests a new understanding of the debate over the audience cost

proposition. Critics of audience costs are correct that audience costs are at least

sometimes irrelevant to understanding the dynamics of interstate conflict (see

Slantchev 2005, 2011; Snyder and Borghard 2011). However, they are incorrect

in disputing that audience costs are always irrelevant to understanding peace and

conflict. The accumulation of audience costs can signal resolve and make dispute,

crisis, or threat escalation less likely, when a dispute is primarily centered on an

information problem. We elaborate on the implications of our research in the

conclusion.

Moon and Souva 435

Audience Cost Proposition

Fearon (1995) contends that war is equivalent to bargaining failure. In the bargain-

ing model, actors may fail to reach an agreement prior to war because of an infor-

mation or a credible commitment problem.2 The information problem may stem

from uncertainty about resolve or military capabilities. That is, one side may make

a demand of the other side that is outside the bargaining range because of uncer-

tainty about the other side’s cost for fighting or the probability of victory. Reach-

ing a compromise is difficult because each actor has an incentive to misrepresent

information about its resolve and capabilities in order to gain the best possible bar-

gain. In some situations, actors may have a good sense of each other’s resolve and

the distribution of power between them but still fail to reach a bargain because at

least one of them does not believe the bargain will be honored by the other actor in

the future. In the standard presentations, one side’s commitment is in doubt

because conditions in the future are expected to change such that an actor has

an incentive to renege on the agreement. Given the expected changes in power

or preferences, it is advantageous to fight now. In other words, in this context,

information asymmetries (about resolve or capabilities) are not the cause of bar-

gaining failure; expectations about honoring an agreement are the problem. The

bargaining model of war suggests two general prescriptions for peace: eliminate

information and commitment problems.

A significant body of research addresses the information problem. Fearon (1994,

1997) argues that audience costs, the cost for backing down from a public threat, can

ameliorate the information problem. The idea is that leaders subject to audience

costs are less likely to bluff, since they have to pay a higher cost for backing down

than leaders not subject to audience costs. If one knows that the other side is not

bluffing, then the information problem is ameliorated. Smith (1998) strengthens the

microfoundations of this argument. Why should the principal (e.g., public or win-

ning coalition) punish the agent (e.g., leader) for backing down if it was prudent

to do so? Smith contends that such an action signals incompetence and that incom-

petence is more likely to be punished when there are elections that facilitate the easy

removal of a leader. Democratic leaders are better able to generate audience costs

than nondemocratic leaders. Schultz (1998) contends that credible opposition polit-

ical parties allow leaders to reveal their preferences more fully, thereby alleviating

the information problem.3

Schultz (1999, 2001) builds on this body of work to advance, what we term, the

audience cost proposition. The audience cost proposition involves two elements.

First, audience cost capable states are better than nonaudience cost capable states

at sending costly signals regarding their resolve. Second, the sending of costly sig-

nals ameliorates the information problem. That is, costly signals reduce conflict

escalation because they reduce uncertainty about resolve.4 If this argument is cor-

rect, then states should be less likely to reciprocate a threat coming from an audience

cost capable regime than from a regime that finds it difficult to generate audience

436 Journal of Conflict Resolution 60(3)

costs.5 Schultz (1999, 2001), Weeks (2008), and Uzonyi, Souva, and Golder (2012)

all find support for the audience cost proposition.6

There are three central criticisms of the audience cost proposition. First,

Slantchev (2005) suggests that it is unlikely that audience costs can be so great that

they outweigh the costs of war. The costs of war, however, apply to the state as a

whole while audience costs concern the fate of the leader. In other words, what mat-

ters is whether going to war is more costly for a leader than backing down, not

whether war is more costly for the state. Second, Slantchev (2005, 2011) argues that

audience costs, or tying hands signals more generally, are a less effective signal of

resolve than military mobilization. The latter not only includes a tying hands com-

ponent but also alters the probability of victory in one’s favor; as a result, backing

down after a military mobilization is less likely than before one. One’s opponents

recognize that military moves are more costly and informative than purely verbal

tying-hands statements; therefore, the accumulation of audience costs is only likely

to be effective when the issue in dispute is of minor importance (Slantchev 2011,

150). Third, Snyder and Borghard (2011) argue that audience costs are not a very

informative signal because politicians generally make ambiguous threats, the prin-

cipal cares more about substantive outcomes than consistency, and autocratic targets

do not think leaders are subject to significant audience costs. Snyder and Borghard’s

argument depends on distinguishing between a genuine commitment and an

audience-cost-manufactured commitment. Genuine commitments reflect the princi-

pal’s policy preferences. In contrast, audience costs are only relevant when it creates

a commitment at odds against the public’s preferences. Thus, audience costs are illu-

sory, or at least impossible to identify, when a public has hawkish preferences (Sny-

der and Borghard 2011, 438).

We agree with criticisms of the scope of the audience cost proposition, but we

disagree with extant arguments about the delineation of that scope. Audience costs

help alleviate information problems. There is nothing in this argument that says it

resolves the credible commitment problem. In fact, Wolford, Reiter, and Carubba

(2011) show that when a dispute involves both an information and a credible com-

mitment problem, several expectations are opposite to the findings of information-

only models. In particular, reducing uncertainty about resolve through the use of

costly signals may not reduce the likelihood of conflict escalating. Furthermore,

actors may even demand more of the other side as uncertainty about resolve

decreases, contrary to information-only arguments. Resolving the information prob-

lem may not promote the settlement of a dispute, Wolford, Reiter, and Carubba

(2011) argue, because it clarifies that one’s opponent is unappeasable, that is, that

one has a credible commitment problem.7

We argue that many disputes are likely to involve a credible commitment prob-

lem or a credible commitment and an information problem. First, research on the

ending of war supports this expectation. Reiter (2009), for example, finds that cred-

ible commitment problems dominate discussions of war termination. Once these

commitment concerns are addressed, wars tend to end. To the extent that war ending

Moon and Souva 437

provides insight on the commencement of war, this research suggests that informa-

tion problems are less common than credible commitment ones. While it is possible

that information-only problems are more common than commitment problems at the

threat stage of a dispute, research on war ending shows that commitment problems

exist and are of importance. Second, research on intrastate war also highlights the

prominence, indeed dominance, of the credible commitment problem (see Walter

1997; Fearon 2004). Third, Fearon (1995) suggests that credible commitment prob-

lems are common. He approvingly cites A. J. P. Taylor’s observation that ‘‘every

war between the Great Powers [from 1848-1918] started as a preventive war, not

a war of conquest’’ (Fearon 1995, 404). Fourth, many disputes occur over territory,

and these disputes tend to be more war-prone than others (Vasquez 1993; Hensel

1996). This is informative. Territorial disputes, we contend, often involve credible

commitment problems, a point we elaborate on in the next section. In brief, there are

a number of reasons for thinking that many international interactions likely revolve

around credible commitment concerns. In these situations, the audience cost propo-

sition is not likely to hold.

Based on the previous arguments, we offer the following hypotheses:

Hypothesis 1: Information problem and audience costs: When a dispute stems

principally from an information problem, a state is less likely to reciprocate a

militarized threat coming from an audience cost capable regime than from a

regime that finds it difficult to generate audience costs.

Hypothesis 2: Credible commitment problem and audience costs: In the con-

text of a credible commitment problem, there should be no relationship

between audience cost capability and militarized threat reciprocation.

Research Design

What is the appropriate set of cases on which to test the hypotheses? Most empirical

research on audience costs examines MIDs, specifically whether an MID is recipro-

cated or not (Partell and Palmer 1999; Schultz 1999; Prins 2003; Weeks 2008; Uzo-

nyi, Souva, and Golder 2012). Gelpi and Griesdorf (2001) examine the outcome of

crises, as identified by the International Crisis Behavior (ICB) project. However,

Downes and Sechser (2012, 459) argue that the MID and ICB data are not appropri-

ate for testing the audience cost proposition for two reasons. First, many of the cases

do not include actual threats. Second, the outcome variables are inappropriate

‘‘because they do not differentiate crisis victories achieved by brute force from those

achieved via coercive diplomacy.’’ They address these concerns by testing the audi-

ence cost proposition on new data, the MCT data created by Sechser (2011). The

MCT data include all cases of ‘‘interstate demands to change the status quo which

are backed by the threat of military force’’ (Sechser 2011, 379). In contrast, MIDs or

ICB crises do not necessarily involve an explicit demand of one state by another. In


fact, Sechser reports that only 6.6 percent of all MIDs, between 1918 and 2001,

involve an MCT. Approximately 27 percent of ICB crises involve such a threat.

There are also important differences in the coding of the dependent variable,

threat outcome, across the three data sets. Following Schultz (1999), most research

examining the audience cost hypothesis with the Correlates of War (COW) MID

data measures the dependent variable as reciprocation (cwhost2 > 1), where recipro-

cation means a threat failed. This is a crude measure of threat success. Some recipro-

cated threats are not failures, in the sense of failing to produce a policy change

without the use of force, and some nonreciprocated threats do fail to produce a policy

change (see examples in Downes and Sechser 2012, 465). Gelpi and Griesdorf

(2001) use the ICB outcome variable to create a three-category success indicator:

lose, draw, or win. The central problem with this measure is that it does not indicate

if the target yielded to a threat or brute force. If the latter is what drove the outcome,

then the threat failed. The dependent variable in our MCT models is directly tied to

the outcome of the threat and is the same as that used by Downes and Sechser (2012).

The variable Threat Success equals 1 if the compelling actor achieved ‘‘full com-

pliance,’’ that is, a score of 2 on the MCT variable ‘‘compliance,’’ otherwise 0. This

measure is consistent with the logic of the audience cost proposition, namely, that

one should examine the outcome of a threat, not the outcome of the dispute. In the

MCT data, compliance is not equal to two if the target experiences more than 100

fatalities.

Contrary to all extant research, Downes and Sechser’s (2012) reexamination fal-

sifies the audience cost hypothesis. Targets are no more likely to back down from a

threat issued from a democratic regime than an autocratic one. As it was designed

specifically to test the audience cost proposition, the MCT data are the basis of our

primary analyses. If our argument is correct, then Downes and Sechser’s (2012)

findings may result from an aggregation bias, as their analyses do not distinguish

between information and credible commitment problems. Nevertheless, to ensure

that our findings are not driven purely by data set choice and to enhance comparabil-

ity with prior research, we also test our hypotheses using the MID and ICB data.

Identification of the type of bargaining problem driving the dispute is central to

evaluating the hypotheses. One strategy for identifying the central bargaining prob-

lem is to examine the diplomatic record for discussions regarding the other side’s

resolve, capabilities, or willingness to honor an agreement. However, the diplomatic

records for all states are not available, and such a task would be incredibly time con-

suming, for you not only have to have a full knowledge of the diplomatic record but

also make subjective determinations about the relative importance of different state-

ments in the record. We propose an indirect approach.

According to the argument presented previously, the audience cost proposition

does not hold if a credible commitment problem is present. If one can identify when

these problems are likely present, then an empirical test can be conducted. To this

end, we offer the first set of criteria for empirically identifying when a credible com-

mitment problem is likely to be present.

Moon and Souva 439

Conceptually, a credible commitment problem is a situation in which at least one

side does not expect the other side to honor an agreement because it is known that

bargaining power will change in the near future, creating incentives to renege (see

Fearon 1995, 407; see also Wagner 2000; Powell 2006). For example, when one side

expects that it will be significantly stronger in the future, any agreement acceptable

today will not be acceptable tomorrow after the change in power. Powell (2006)

notes that large and rapid changes in power between domestic factions may also cre-

ate a credible commitment problem between states. For example, if the leadership of

state A believes an agreement with state B is more likely to result in a loss of domes-

tic power than going to war, then state A’s leadership cannot credibly commit to a

bargain with state B. Powell (2006) also notes that if the cost of preserving the status

quo is exceptionally large (i.e., larger than the cost of fighting), then one may not be

able to commit oneself to peace.

We contend that a credible commitment problem is likely to be present for some

territorial disputes. Indeed, it is common to illustrate the credible commitment prob-

lem with a territorial dispute (e.g., Fearon 1995, 408; Wagner 2000, 480). Territorial

disputes, however, do not always involve enforcement concerns, only when the ter-

ritory is militarily, economically, or politically valuable. Territory is militarily valu-

able if its transfer significantly changes the likely costs of a future military contest.

Similarly, territory is economically valuable if it allows a state to increase its wealth

and weapons, which can then be used to change the terms of a settlement.

Territory is politically valuable when a significant segment of a state’s population

has a psychological attachment to it. Religious and cultural significance are the pri-

mary reasons for psychological attachment but such attachment may also be manu-

factured by elites to rally support.8 In such a situation, the territorial transfer

threatens to weaken political elites hold on power. In other words, leaders are

involved in a two-level bargaining game where domestic factors significantly influ-

ence the credibility of an agreement at the international level (Putnam 1988). With

politically valuable territory, the yielding state cannot credibly commit to a deal

because the domestic principal will not approve it; in other words, yielding on polit-

ically valuable territory is more likely to result in the loss of office than not yielding.

For convenience, we label disputes over militarily, economically, or politically valu-

able territory a strategic territorial dispute.

To clarify the utility of this measurement approach, it is helpful to analyze the

topic of what constitutes a credible commitment problem from a different angle.

We contend that disputes that do not involve strategic territory are unlikely to

involve a credible commitment problem. In contrast, one might suggest that policy

issues are more likely to involve credible commitment concerns for the cost of rene-

ging on a policy issue, or more broadly, a minor issue is low. Morrow et al. (2006)

make an argument along these lines in the context of postwar stability. In that con-

text, the argument may be valid for the bargaining problem leading to war has been

settled, at least temporarily. However, in our prewar context, policy issues should be

less likely to involve a credible commitment problem. To see why, let us assume the


following. State A yields on some issue to state B. In other words, state B gains

something it did not previously have and state A is the yielder. Credible commitment

problems revolve around either the yielding state’s (state A’s) expectations about

what the gaining state (state B) will do in the future or how yielding shifts domestic

power in state A to such an extent that it makes it more likely that the leader in state A

will lose office because of yielding than lose office because he or she has not settled

the issue with state B.

The first mechanism centers on what state A believes state B will do in the future.

Are additional demands by state B likely if state A yields on a policy issue? What is

critical to answering this question is understanding how the bargain changes the

expected utility for different policy choices in the gaining state, state B. On average,

policy issues are unlikely to lead to a change in military power, reducing the incen-

tive for future demands. Yielding on a policy prohibiting others from developing

nuclear weapons may be an exception; in our sample, these situations should be very

rare. If there are any, they bias against us finding support for our hypotheses. In con-

trast, yielding on a strategic territorial issue may well create incentives in the gaining

state to press for more demands. Overall, yielding on a policy issue is much less

likely to lead to a shift in power between states A and B than yielding on a strategic

territorial issue; as a result, yielding on a policy issue is unlikely to lead to further

demands.

The second mechanism centers on changes in domestic power within state A. In

general, policy issues will be of minor salience; therefore, an agreement on one is

unlikely to significantly alter the domestic power situation. With no shift in domestic

power resulting from yielding on a policy issue, there will be no new incentive for a

leader to back away and enter into costly military conflict. Moreover, reneging on a

bargain is costly for it entails costly military conflict. Thus, a leader would only con-

sider reneging if the bargain significantly altered domestic power, which is not the

case for minor policy issues. In summary, bargains on minor policy issues are

unlikely to generate credible commitment problems because such agreements nei-

ther significantly alter the balance of military power between countries nor signifi-

cantly affect support for a leader within a country.

To identify the presence of militarily, economically, or politically valuable terri-

tory, we turn to Huth and Allee’s (2002) coding of territorial disputes. They code all

territorial disputes in the world between 1919 and 1995 and identify whether the ter-

ritory was strategically important or contained ethnic conationals. Strategically valu-

able territory is either militarily significant in that it directly affects the costs of

conflict (Huth 1996, 256) or it contains ‘‘natural resources that were used by the state

in the production of military weapon systems’’ (Huth and Allee 2002, 67). Such ter-

ritory is likely to generate credible commitment concerns. The presence of ethnic

conationals is a proxy for politically valuable territory and, therefore, also generates

a credible commitment problem. When ethnic conationals are present, it is politi-

cally difficult for a leader to commit to transferring the territory. Allowing the peace-

ful transfer of territory when a significant portion of one’s population has a salient

Moon and Souva 441

psychological attachment to it is likely to lead to a loss of domestic power; as a

result, such a transfer is not likely. Moreover, the transfer of such territory means

that the receiving state now needs to invest in a long-term defensive posture. In addi-

tion, if the transferring state has multiple ethnic groups, it may face additional ter-

ritorial demands either from other domestic groups aiming to secede (see, e.g.,

Walter 2003, 2006) or other states advancing territorial claims. In such a context,

a regime may not be able to credibly commit to upholding a territorial change; others

are likely to believe the leadership will be replaced and the agreement on the terri-

torial change broken. In summary, if Huth and Allee (2002) identify territory as mili-

tarily, economically, or politically valuable and Sechser identifies the issue at stake

as territory, then the variable Commitment Problem Territory equals one, zero oth-

erwise. That is, when Commitment Problem Territory equals zero, the bargaining

problem underlying the dispute most likely only involves an information problem.

In our sample, about 50 percent of MCT cases that involve a territorial issue are over

territory that contributes to a credible commitment problem. If these cases are dif-

ferent than the others, as we argue, then Downes and Sechser’s (2012) findings are

not surprising.

Next, we distinguish between challengers that are likely to face audience costs

and those unlikely to be subject to such a penalty. The variable Audience Costs

involves the following two components: institutions that facilitate punishment and

a costly action. In other words, audience costs are a function of a regime having audi-

ence cost capacity and a leader in such a regime taking particular types of actions.

Our primary measure for audience cost capacity comes from Uzonyi, Souva, and

Golder (2012). They argue that the institutions affecting the principal’s cost for sanc-

tioning the leader influence the leader’s ability to generate audience costs. In broad

terms, when a state’s institutions do not permit challengers to the head of state and

citizens are not free to mobilize, the principal faces very costs for attempting to sanc-

tion a leader; consequently, such regimes cannot generate audience costs. In addition

to a conceptualization of audience costs anchored in institutions, this measure covers

a larger temporal domain, 1800 through 2010. We treat a state as having audience

cost capacity if it scores one or higher on the Uzonyi, Souva, and Golder (2012)

audience cost capacity index.9

Research examining audience costs using the MID data assumes that MIDs create

audience costs. All types of hostile actions are further assumed to generate the same

degree of audience costs. Gelpi and Griesdorf (2001), on the other hand, contend that

audience costs are a function of crisis management techniques, which do not neces-

sarily involve militarized action, and that some actions (i.e., techniques) generate

more audience costs than other actions. For example, in their study, actors that man-

age the crisis using nothing but military force incur more potential audience costs

than actors that handle the crisis using economic sanctions or arbitration. In essence,

they treat audience costs as an ordinal variable instead of a binary one. Viewing

audience costs as an ordinal or continuous concept is more consistent with original

discussions of the concept. Schultz (1999, 236-37), for example, notes that the


magnitude of the audience costs affects the credibility of the threat and that magni-

tude is a function of both institutions and the nature of the threat. Tomz (2007) pro-

vides experimental evidence showing that audience costs increase in magnitude as

the severity of the threat increases. Unfortunately, the MCT data do not permit the

creation of a continuous measure. To stay as close as possible to the Schultz and

Gelpi and Griesdorf measurement strategies, we code the variable Audience Costs

as equal to one if and only if an audience cost capable regime took a militarized

action, zero otherwise, where militarized actions are drawn from the MCT data.

To test the hypotheses, Commitment Problem Territory needs to be interacted with

Audience Costs. In other words, the goal is not to learn the average effect of audience

cost capacity, as has been the focus in other studies, but to examine if audience cost

capacity is relevant under specific conditions, namely when the motivation for a com-

pellent threat is a credible commitment problem or the absence of such a problem. To

ease interpretation, we create four binary composite variables: Audience Costs �Commitment Problem Territory, No Audience Costs � Commitment Problem Terri-

tory, Audience Costs � No Commitment Problem Territory, and No Audience Costs

� No Commitment Problem Territory. When we focus on Hypothesis 1, we omit

No Audience Costs � No Commitment Problem Territory and when we focus on

Hypothesis 2, we omit No Audience Costs � Commitment Problem Territory.

We also include the following control variables, which we obtained from Downes

and Sechser’s (2012) data: the challenger’s share of dyadic military capabilities,

contiguity, Dyadic Alliance Portfolio Similarity (weighted), the initiator’s and tar-

get’s alliance portfolio similarity with the regional leader, binary variables for

whether the alliance was between two major powers, a major power challenger and

a minor power target, or a minor and a major power (the base category is two minor

powers), and binary variables for each year of World War II.

Empirical Analysis

Our analysis of the MCT data is presented in Table 1. We begin with a reanalysis of

the MCT data with our base model specification.10 The estimates from this model

support Downes and Sechser’s (2012) central findings. Specifically, consistent with

Downes and Sechser, we do not find a significant influence of audience costs on

threat success (model 1). Next, we add the audience cost and credible commitment

problem interactions to our model (models 2 and 3). In model 2, the reference cate-

gory is challengers that lack audience costs and are not involved in a dispute cen-

tered on credible commitment concerns. Therefore, to test the effect of audience

costs in the context of information problems (Hypothesis 1), we examine the param-

eter estimate for Audience Costs � No Commitment Problem Territory. This coef-

ficient is negative and statistically significant at conventional levels. This implies

that when a dispute only involves asymmetric information, militarized threats from

audience cost capable challengers are less likely to fail than such threats from non-

audience cost capable challengers, just as the audience cost proposition expects. In

Moon and Souva 443

fact, an audience cost capable regime is about 45 percent less likely to experience a

failed compellent threat. This is perhaps even more noteworthy, when we compare it

to the substantive effect of other variables. Changing a dyad from contiguous to non-

contiguous only reduces the probability of failure by 14 percent. Further, model 2

correctly predicts about 67 percent of all compellent threat cases, a 19 percent reduc-

tion in error.

Table 1. Testing the Effect of Audience Costs on Threat Success Using the MilitarizedCompellent Threat Data, 1919–1995.

Logit analysis using MCT DV: full compliance

Modified models

Model (1) Model (2) Model (3)

Democratic initiator 0.701(0.458)

Strategic territory 0.359(0.420)

Audience cost capacity ¼ 1 �0.578(1.130)

�0.847(1.182)Strategic territory ¼ 1

Audience cost capacity ¼ 1 �1.391***(0.520)

�1.660***(0.646)Strategic territory ¼ 0

Audience cost capacity ¼ 0 0.269(0.444)Strategic territory ¼ 1

Audience cost capacity ¼ 0 �0.269(0.444)Strategic territory ¼ 0

Major–Major dyad �0.301(0.841)

�0.433(0.890)

�0.433(0.890)

Major–Minor dyad 0.710(0.508)

0.306(0.491)

0.306(0.491)

Minor–Major dyad �2.211**(0.955)

�2.380**(1.198)

�2.380**(1.198)

Power ratio �0.606(0.657)

�0.307(0.700)

�0.307(0.700)

Contiguity �0.415(0.456)

�0.954**(0.454)

�0.954**(0.454)

Alliance portfolio similarity �0.110(0.690)

�0.124(0.664)

�0.124(0.664)

Alliance similarity initiator �0.456(0.606)

0.749(0.556)

0.749(0.556)

Alliance similarity target �1.188*(0.647)

�1.492**(0.644)

�1.492**(0.644)

Constant 0.821(0.862)

1.717*(0.919)

1.986**(0.979)

Observations 211 211 211

Note: MCT ¼ militarized compellent threat; DV ¼ dependent variable. Standard errors are clustered oneach crisis. World War year dummies are included but not reported here.*Significant at 10 percent. **Significant at 5 percent. ***Significant at 1 percent, two-tailed test.


To ease interpretation of the parameter estimates relevant to Hypothesis 2, we

reestimate the model with a different reference category. The reference category

in model 3 is No Audience Costs � Commitment Problem Territory. If Hypothesis 2

is correct, we should observe no difference in MCT failures between audience cost

capable and nonaudience cost capable regimes taking militarized actions in the context

of a credible commitment problem. This is exactly what we find in model 3. The coef-

ficient on Audience Costs� Commitment Problem Territory is not statistically signif-

icant. When disputes involve a credible commitment problem, regimes with audience

costs do not experience fewer MCT failures than nonaudience cost regimes. This is

consistent with our second hypothesis as well as Downes and Sechser’s findings. In

brief, we find that audience costs help reduce information problems but not credible

commitment problems when we analyze the MCT data.11

Tests Using the MID and ICB Data

MID Analysis

Notwithstanding the inability to falsify our hypotheses using the MCT data, it is

worth asking if our findings are an artifact of that data. Do we continue to find sup-

port for both hypotheses while analyzing the MID data? Our research design for the

analyses of the MID data mirrors that of Uzonyi, Souva, and Golder (2012). Where

Schultz and Weeks examine the directed–militarized-interstate-dispute-dyad initia-

tion as the unit of analysis, Uzonyi, Souva, and Golder analyze a censored selection

model with the directed dyad year as the unit of analysis (see Schultz 1999; Weeks

2008; Uzonyi, Souva, and Golder 2012). The latter strategy has the benefit of addres-

sing the self-selection issue. If states choose targets as rational arguments contend,

then examining the reciprocation of a threat without taking into account the initiation

of it will result in biased inferences. Thus, we have two dependent variables, MID

initiation and MID escalation. An MID is an event ‘‘in which the threat, display

or use of military force short of war by one member state is explicitly directed

toward the government, official representatives, official forces, property, or territory

of another state’’ (Jones, Bremer, and Singer 1996, 168). MID Initiation equals one if

state A threatens or uses force before state B. (If multiple MIDs occur in a year, we

focus on the most serious one.) Braithwaite and Lemke (2011) show that alternative

measures of MID escalation may produce different results. To guard against mis-

placed confidence or pessimism in our results, we examine two measures of MID

escalation. First, we use the most common measure in this research program, MID

reciprocation. MID Reciprocation equals one when the target of an MID responds

with a threat, display, or use of force, zero otherwise.12 Second, we measure MID

escalation as the occurrence of a militarized dispute that produces at least one fatal-

ity; we label this variable Fatal MID. We use version 3.1 of the COW MID data for

the years 1816 through 2000 (Ghosn, Palmer, and Bremer 2004) as generated by

EUGene (Bennett and Stam 2000).

Moon and Souva 445

As theory and past research indicate that the choices to initiate and escalate an MID

are linked, we estimate censored selection models. Parameter estimates and standard

errors for the key variables are presented in the tables. Before turning to an evaluation

of the hypotheses, we note that the selection parameter, r, is statistically significant in

each model, indicating that MID escalations are the outcome of a systematic selection

process that first involves the occurrence of a militarized dispute (see also Reed 2000).

Further, our parameter estimates for the selection model are consistent with past

research; more broadly, our only unique findings are those that bear directly on the

hypotheses. (Full model results are available in the Online Appendix.)

The estimates on conflict escalation are central to evaluating the hypotheses.

Model 4 (Table 2) and model 7 (Table 3) are base models that mimic the research

design of Schultz (1999), Weeks (2008), and Uzonyi, Souva, and Golder (2012).

We see that the coefficient on Audience Costs is negative and statistically signifi-

cant, indicating that audience cost generating challengers are less likely to be reci-

procated by targets. This result conforms to extant research and implies that any

support for the hypotheses is unlikely to result from a different sample, measure-

ment, or research design choice.

In models 5, 6, 8, and 9, we test our hypotheses by identifying whether a dispute

involved a credible commitment problem. Model 5 examines MID reciprocations in

the context of strategic territorial disputes, which we contend are an indicator of a

credible commitment problem. As before, we find a negative and statistically signif-

icant coefficient for the variable Audience Costs � No Commitment Problem Terri-

tory. In other words, when it is likely that only information problems motivate a

dispute, we find that audience costs increase threat credibility.

If Hypothesis 2 is correct, we should observe no difference in MID reciprocations

between audience cost generating regimes and nonaudience cost generating regimes

in the context of a credible commitment problem. This is exactly what we find in

model 6. The coefficient on Audience Costs� Commitment Problem Territory is not

statistically significant. When disputes involve a credible commitment problem,

audience cost generating states do not experience fewer MID reciprocations than

nonaudience cost generating states. This is consistent with the idea that audience

costs reduce information asymmetries but not credible commitment concerns.13

ICB Analysis

Instead of examining target reciprocations of militarized threats, shows, or uses of

force, Gelpi and Griesdorf (2001) analyze how relative audience costs affect crisis

outcomes. The state with relatively greater audience costs, they contend, is more

likely to prevail in a crisis, ceteris paribus, because that state has communicated

greater resolve on the issue. This is not the same as the audience cost proposition

that we discussed previously, but it is related. The audience cost proposition expects

that targets are more likely to back down after a costly signal has been sent by an

audience cost capable regime than a regime with limited audience cost capacity.


States that back down do not prevail. In that sense, the Gelpi and Griesdorf expecta-

tion is similar to the audience cost proposition. Is the empirical record consistent

with the hypotheses we delineate in the context of the Gelpi and Griesdorf research

design? In other words, we expect that Gelpi and Griesdorf’s findings on audience

costs only hold for crises that do not involve a credible commitment problem.

For our purposes, there are four important differences between the Gelpi and

Griesdorf research design and the one used to examine the audience cost proposition.

First, Gelpi and Griesdorf (2001) focus on crises, coded by the ICB project (Brecher

Table 2. Top Half: Testing the Effect of Audience Costs on Reciprocation in the Context ofInformation and Credible Commitment Problems, Militarized Interstate Dispute Data,Outcome ¼ Reciprocation, 1946–1995.

Outcome equation: MID reciprocation Model (4) Model (5) Model (6)

Audience cost capacity initiator �0.263***(�0.082)

Audience cost capacity ¼ 1 0.111(0.150)

�0.072(0.165)Commitment problem territory ¼ 1

Audience cost capacity ¼ 1 �0.370***(0.094)

�0.552***(0.184)Commitment problem territory ¼ 0

Audience cost capacity ¼ 0 0.183(0.156)Commitment problem territory ¼ 1

Audience cost capacity ¼ 0 �0.183(0.156)Commitment problem territory ¼ 0

Distance �0.002(0.063)

�0.022(0.066)

�0.022(0.066)

Power ratio �0.149(�0.168)

�0.088(0.183)

�0.088(0.183)

Alliance ties 0.049(�0.098)

0.046(0.104)

0.046(0.104)

Major–Major dyad �0.174(0.246)

�0.038(0.265)

�0.038(0.265)

Minor–Major dyad �0.208(0.182)

�0.134(0.194)

�0.134(0.194)

Major–Minor dyad �0.010(0.139)

0.025(0.150)

0.025(0.150)

Alliance portfolio similarity 0.327**(0.135)

0.284**(0.145)

0.284**(0.145)

Alliance similarity initiator 0.113(0.071)

0.143*(0.077)

0.143*(0.077)

Alliance similarity target 0.028(0.066)

0.043(0.070)

0.043(0.070)

Contiguity �0.299**(0.141)

�0.173(0.161)

�0.173(0.161)

Constant 1.380***(0.428)

1.03**(0.493)

1.217***(0.454)

Moon and Souva 447

Table 2. Bottom Half: Testing the Effect of Audience Costs on Reciprocation in the Contextof Information and Credible Commitment Problems, Militarized Interstate Dispute Data,Outcome ¼ MID Initiation 1946–1995.

Selection equation: MID initiation Model (4) Model (5) Model (6)

Audience cost capacity initiator 0.077*(0.044)

0.081*(0.044)

0.081*(0.044)

Audience cost capacity target 0.118**(0.047)

0.126***(0.048)

0.126***(0.048)

Joint audience cost capacity �0.267***(0.062)

�0.275***(0.062)

�0.275***(0.062)

Commitment problem territory 0.748***(0.054)

0.740***(0.054)

0.740***(0.054)

Distance �0.198***(0.021)

�0.198***(0.021)

�0.198***(0.021)

Power ratio 0.254***(0.053)

0.254***(0.053)

0.254***(0.053)

Major–Major dyad 1.029***(0.151)

1.029***(0.150)

1.029***(0.150)

Minor–Major dyad 0.562***(0.074)

0.563***(0.074)

0.563***(0.074)

Major–Minor dyad 0.365***(0.061)

0.365***(0.061)

0.365***(0.061)

Alliance portfolio similarity �0.360***(0.059)

�0.359***(0.059)

�0.359***(0.059)


0.017(0.033)

0.017(0.033)

Alliance similarity target 0.062*(0.036)

0.061*(0.036)

0.061*(0.036)

Alliance ties 0.016(0.061)

0.017(0.060)

0.017(0.060)

Contiguity 0.913***(0.058)

0.916***(0.057)

0.916***(0.057)

Peace years �0.104***(0.008)

�0.105***(0.008)

�0.105***(0.008)

Time spline1 �0.000***(0.000)

�0.000***(0.000)

�0.000***(0.000)

Time spline2 0.000***(0.000)

0.000***(0.000)

0.000***(0.000)

Time spline3 �0.000(0.000)

�0.000(0.000)

�0.000(0.000)

Constant �1.144***(0.173)

�1.143***(0.173)

�1.143***(0.173)

r �0.544***(0.085)

�0.367***(0.116)

�0.367***(0.116)

Observations 769,782 769,782 769,782Censored observations 768,454 768,454 768,454Uncensored observations 1,328 1,328 1,328

Note: MID¼militarized interstate dispute. Standard errors clustered on the directed dyad in parentheses.*Significant at 10 percent. **Significant at 5 percent. ***Significant at 1 percent, two-tailed test.


and Wilkenfeld 1997), and not MIDs. Second, their dependent variable is whether

the challenger loses, draws, or wins the crisis, as opposed to whether the compellent

threat succeeded (Downes and Sechser data) or the target fails to reciprocate a mili-

tarized threat (MID data). Third, they include different covariates: regime type of the

defender, joint democracy multiplied by relative power, military capabilities of an

ally, relative stakes in the issue, relative resolve, challenger has nuclear weapons,

and defender has nuclear weapons. Fourth, they measure audience costs differently.

That is, they measure audience costs as the difference between the challenger’s and

Table 3. Top Half: Testing the Effect of Audience Costs on Dispute Escalation in the Contextof Information and Credible Commitment Problems, Militarized Interstate Dispute Data,Outcome ¼ Fatal MID, 1946–1995.

Outcome equation: fatal MID Model (7) Model (8) Model (9)

Audience cost capacity initiator �0.170*(0.098)


�0.113(0.157)Commitment problem territory ¼ 1

Audience cost capacity ¼ 1 �0.217*(0.122)

�0.380**(0.183)Commitment problem territory ¼ 0

Audience cost capacity ¼ 0 0.163(0.160)Commitment problem territory ¼ 1

Audience cost capacity ¼ 0 �0.163(0.160)Commitment problem territory ¼ 0

Distance �0.069(0.082)

�0.087(0.084)

�0.087(0.084)

Power ratio �0.415**(0.199)

�0.394*(0.203)

�0.394*(0.203)

Alliance ties �0.131(0.116)

�0.145(0.120)

�0.145(0.120)

Major–Major dyad �0.543*(0.312)

�0.478(0.311)

�0.478)(0.311)

Minor–Major dyad �0.308(0.207)

�0.258(0.216)

�0.258(0.216)

Major–Minor dyad �0.140(0.182)

�0.123(0.189)

�0.123(0.189)

Alliance portfolio similarity 0.367**(0.152)

0.346**(0.161)

0.346**(0.161)


0.064(0.090)

0.064(0.090)

Alliance similarity target �0.005(0.081)

0.004(0.084)

0.004(0.085)

Contiguity �0.379**(0.160)

�0.298*(0.177)

�0.298(0.177)

Constant 1.450***(0.555)

1.206**(0.610)

1.370**(0.572)

Moon and Souva 449

Table 3. Bottom Half: Testing the Effect of Audience Costs on Dispute Escalation in theContext of Information and Credible Commitment Problems, Militarized Interstate DisputeData, Outcome ¼ Initiation, 1946–1995.

Selection equation: MID initiation Model (7) Model (8) Model (9)

Audience cost capacity initiator 0.116**(0.047)

0.118**(0.047)

0.118**(0.047)

Audience cost capacity target 0.163***(0.048)

0.167***(0.049)

0.167***(0.049)

Joint audience cost capacity �0.290***(0.063)

�0.294***(0.063)

�0.294***(0.063)

Commitment problem territory 0.744***(0.054)

0.739***(0.054)

0.739***(0.054)

Distance �0.198***(0.021)

�0.198***(0.021)

�0.198***(0.021)

Power ratio 0.234***(0.054)

0.234***(0.054)

0.234***(0.054)

Major–Major dyad 0.996***(0.143)

0.997***(0.142)

0.997***(0.142)

Minor–Major dyad 0.554***(0.074)

0.554***(0.074)

0.554***(0.074)

Major–Minor dyad 0.335***(0.062)

0.336****(0.062)

0.336****(0.062)

Alliance portfolio similarity �0.367***(0.059)

�0.366***(0.059)

�0.366***(0.059)


0.015(0.034)

0.015(0.034)

Alliance similarity target 0.069*(0.036)

0.068*(0.036)

0.068*(0.036)

Alliance ties 0.027(0.062)

0.027(0.062)

0.027(0.062)

Contiguity 0.883***(0.059)

0.885***(0.059)

0.885***(0.059)

Peace years �0.102***(0.008)

�0.102***(0.008)

�0.102***(0.008)

Time spline1 �0.000***(0.000)

�0.000***(0.000)

�0.000***(0.000)

Time spline2 0.000***(0.000)

0.000***(0.000)

0.000***(0.000)

Time spline3 �0.000(0.000)

�0.000(0.000)

�0.000(0.000)

Constant �1.200***(0.177)

�1.202***(0.177)

�1.202***(0.177)

r �0.575***(0.094)

�0.448***(0.121)

�0.448***(0.121)

Observations 769,636 769,636 769,636Censored observations 768,454 768,454 768,454Uncensored observations 1,182 1,182 1,182

Note: MID¼militarized interstate dispute. Standard errors clustered on the directed dyad in parentheses.*Significant at 10 percent. **Significant at 5 percent. ***Significant at 1 percent, two-tailed test.


defender’s democracy score multiplied by the difference in relative resolve, where

relative resolve is based on the crisis management strategies employed by the chal-

lenger and defender. Failing to falsify our hypotheses in this context would

strengthen our confidence in them.

Central to our argument is the distinction between information-only and credible

commitment problem contexts. As before, we contend that a useful way to identify

the likely presence of a credible commitment problem is if a dispute is over strategic

territory. As before, we merged in Huth and Allee’s (2002) data and created our

measure of commitment problem territory for the ICB data. We, then, stratify Gelpi

and Griesdorf’s (2001) data on whether a credible commitment was present and

rerun their model. We expect that their key audience cost variables Democratic

Challenger and Audience cost � Resolve will be statistically insignificant when

we run their model on crises with a territorial credible commitment problem but sig-

nificant and negative when we examine all other crises.

The first column (model 10) of Table 4 shows the estimates for the Gelpi and

Griesdorf model on all cases. Democratic Challenger and Audience cost � Resolve

are significant and positive, just as Gelpi and Griesdorf find. Next, we estimate their

model only on crises that do not involve a credible commitment problem centered on

territory (model 11). As we expect, the Democratic Challenger and Audience cost�Resolve variables remain significant and positive. However, when we estimate the

model on crises that do involve a credible commitment problem, we find that Dem-

ocratic Challenger is not significant and the Audience cost � Resolve interaction is

statistically significant and negative (model 12).14 Failing to falsify the hypotheses

with the Gelpi and Griesdorf data and model strengthens our confidence in them.

Next, we modified the Gelpi and Griesdorf’s model to more closely approximate

the research design we used previously. Instead of including both a relative audience

cost variable and a measure of the initiator’s regime type, we only include a measure

for the likely presence of audience costs in the initiator and then interact this variable

with the credible commitment problem variable, that is, a crisis involving strategic

territory based on the Huth and Allee data. An initiator has a high probability of

experiencing audience costs if its crisis management technique involves the threat

of military force and its political institutions are associated with a low cost for the

principal to punish an agent (as before, an audience cost capacity score of one or

greater). With these variables, we then estimate a model very similar to Schultz’s

model. Estimates are presented in models 13 and 14. Our findings are similar to

before and consistent with Hypotheses 1 and 2.15

Discussion

Notwithstanding the importance of our findings, our analyses of the MCT data raise

a new question: what kind of action is necessary to generate sufficient audience costs

that can eliminate, or significantly reduce, information problems? Research by

Schultz (1999), Weeks (2008), and Uzonyi, Souva, and Golder (2012) implicitly

Moon and Souva 451

Table 4. Testing the Effect of Audience Costs on Crisis Success Using the International CrisisBehavior Project Data, 1919–1995.

Ordered probit analysisDV: challenger loses,draws, or wins the crisis

Originalmodel Modified models

Model(10)

Model (11)territorialcrises ¼ 0

Model (12)territorialcrises ¼ 1

Model(13)

Model(14)

Challenger’s democracy 0.038***(0.013)

0.042***(0.014)

0.027(0.032)

Defender’s democracy 0.015(0.012)

0.016(0.014)

0.028(0.030)

Relative audience costs �relative resolve

0.001*(0.001)

0.001**(0.001)

�0.037*(0.017)*

Relative military capability� joint democracy

�0.002*(0.001)

�0.002*(0.001)

�0.004(0.004)

Relative resolve �0.009(0.097)

�0.030(0.102)

0.462(0.422)


0.331(0.222)Commitment problem

territory ¼ 1Audience cost capacity ¼ 1 0.407**

(0.186)0.439*

(0.223)Commitment problemterritory ¼0

Audience cost capacity ¼ 0 0.046(0.171)Commitment problem

territory ¼ 1Audience cost capacity ¼ 0 0.051

(0.176)Commitment problemterritory ¼ 0

Relative military capability� disputants sharealliance tie

0.172(0.230)

0.233(0.250)

�0.425(0.589)

0.017(0.233)

0.015(0.233)

Relative military capability 0.788***(0.264)

0.919***(0.305)

0.674(0.854)

0.655***(0.230)

0.654***(0.230)

Relative interests at stake 0.233***(0.083)

0.248***(0.090)

0.423(0.349)

0.215***(0.086)

0.218***(0.086)

Challenger nuclearweapons

0.052(0.198)

�0.019(0.221)

0.361(0.496)

0.151(0.187)

0.147(.187)

Defender nuclear weapons �0.289(0.197)

�0.247(0.227)

�0.424(0.493)

�0.217(0.173)

�0.235(0.172)

First threshold 0.504 0.663 0.016 0.107 0.082Second threshold 1.622 1.692 1.708 1.120 1.182Observations 409 339 70 409 409

Note: DV ¼ dependent variable. Standard errors clustered on each crisis.*Significant at 10 percent. **Significant at 5 percent. ***Significant at 1 percent, two-tailed test.


assume that some sort of military action is necessary for generating audience costs

sufficiently large for the signal to lead to a change in beliefs. When we make a sim-

ilar assumption and analyze crises, as generated by the ICB project, or Sechser’s

(2011) MCT data we continue to find support for the scope-delimited audience cost

proposition (Hypothesis 1). Not all research, however, agrees that a military action is

necessary to generate audience costs. Downes and Sechser (2012) focus only on ver-

bal threats. Tomz (2007) finds that verbal threats are sufficient for generating audi-

ence costs. But he also finds that audience costs are greater when there is military

action compared to when there is only a verbal threat. In light of this implicit debate

about the threshold, a leader needs to cross to incur audience costs sufficiently large

for the signal to be costly, we reanalyzed models 2 and 3 in Table 1 using the criteria

advanced by Downes and Sechser, namely that a verbal threat is sufficient. With that

measure of audience costs, we do not find support for Hypothesis 1; the results are

still consistent with the credible commitment problem hypothesis. In light of Tomz’s

findings that a verbal threat should be sufficient for audience costs, this reanalysis

cuts against our argument. Nevertheless, it is not clear that a verbal threat is the

appropriate threshold. At a minimum, a critic of audience costs would have a stron-

ger argument if we failed to find support for audience costs in model 2 based on the

military action measure. Further, the insignificance of the verbal audience cost mea-

sure and significance of the military action audience cost measure cast doubt on

Slantchev’s (2005) suggestion that military mobilization is equally costly for all

regime types. Our findings indicate that military mobilization is a more effective sig-

nal for audience cost capable regimes.

Conclusion

Audience costs are the costs a leader pays for backing down from a public threat.

Extant research contends that some regimes are better equipped than others to gen-

erate audience costs. This ability to generate audience costs is important, as it may

allow states to resolve their disputes short of significant use of armed force. Specif-

ically, audience costs may ameliorate information problems that cause bargaining

failure and war. We call this the audience cost proposition.

We argue that extant tests of the audience cost proposition are not correct. The

proposition only applies to information problems, but many disputes involve a cred-

ible commitment problem or both a credible commitment and information problem.

In these latter contexts, the audience cost proposition should not hold. To test this

narrower version of the audience cost proposition, we identify indicators for the

likely presence of a credible commitment problem between states.

We find that the audience cost proposition is not supported when a commitment

problem is a driving force determining disputes, as expected by theoretical models

of crisis bargaining.16 Viewed empirically, we show that when countries fight over

strategic territory, audience costs do not reduce escalation. However, when cred-

ible commitment problems are not present but information problems are, then

Moon and Souva 453

we find support for the audience cost proposition. These findings obtain regardless

of the data—MCTs, MIDs, or ICB crises—we use to analyze our model. One

implication of this research is that Downes and Sechser’s (2012) findings are not

purely a function of a change in data. Their findings may well stem from a different

percentage of credible commitment problems in their data relative to the MID data.

One alternative interpretation of these results is that they support Slantchev (2011)

who argues that tying-hands signals, of which audience costs are a principal form,

are only likely to be useful when a dispute involves a minor issue. To the extent

that credible commitment problems, or the types of situations we identify as cred-

ible commitment problems, involve major issues, our findings are compatible with

Slantchev’s argument.

A broader implication of our research is that context matters. Formal models,

for example, often address a specific type of problem. Research designs testing

implications from such models need to take that context into account. Another

implication of our research is that more attention should be devoted to analyzing

credible commitment problems related to international conflict. Research on

civil war highlights the role of third parties for addressing credible commitment

concerns (see Walter 1997). Can third parties play a similar role for interstate

disputes?

Related to the importance of context is the utility of identifying and distin-

guishing between different bargaining problems. While our findings suggest our

measurement approach is credible, there is surely still error in our measure of

credible commitment problems. Future research should examine if there are

other processes besides strategic territory that generate a credible commitment

problem and collect more finely tuned data on strategic territory to examine

if all of those disputes have the same effect on bargaining. Given our findings,

we believe there are relatively few instances where we code a case as only

involving information problems that actually contain a credible commitment

problem, but there are a probably some. For example, it has been suggested that

credible commitment concerns were central to the outbreak of the 2003 Iraq

war (Lake 2011). Perhaps there is a credible commitment problem when there

is a rivalry and one state appears to be increasing its arsenal of weapons of mass

destruction. With respect to further parsing of strategic territory, one might

examine whether territory with direct military significance is the same as terri-

tory with important natural resources. In brief, we think our research takes an

important step in distinguishing between different bargaining contexts, but more

work is needed in this area.

Survey experiments have produced some of the most compelling research in sup-

port of audience costs. But, none of this research addresses the contextual factors

highlighted in this article. Future experimental research examining audience costs

should control for the bargaining context. It would also be useful to construct an

experiment that allows one to distinguish between issue salience and information/

credible commitment problems.


Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship,

and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of

this article.

Notes

1. Schultz (1999) notes that the informational proposition could stem from two mechanisms

besides audience costs. First, democratic polities may be more transparent than autocratic

ones. Second, opposition parties in democracies may allow for the credible revealing of

information. We focus on the audience cost mechanism for two reasons. First, Schultz

contends that all three mechanisms lead to the same expectation regarding target

responses to democratic threats. Second, the audience cost mechanism has received the

most attention in the literature and is the subject of debate.

2. Powell (2006) demonstrates that issue indivisibility is one form of the credible commit-

ment problem.

3. Slantchev (2006) argues that democratic political institutions are not central to the gen-

eration of audience costs, but a free press is. However, Slantchev does not dispute that the

facilitation of audience costs allows one to send a costly signal and reduce the information

problem.

4. Schelling (1960) does not use the term audience costs, but makes similar arguments about

the role of costly signals in clarifying resolve and reducing conflict escalation.

5. What we refer to here as the audience cost proposition refers strictly to Schultz’s theoret-

ical argument, not to Fearon’s. Fearon (1994) accepts the first element, but would modify

the second. When two regimes generate audience costs at similar rates, the information

problem is less acute and war is less likely.

6. Partell and Palmer (1999), Prins (2003), Eyerman and Hart (1996), Lektzian and Souva

(2009) also find support for audience costs, but they do not specifically test what we term

the audience cost proposition.

7. Gartzke (1999) offers an alternative view. He contends that there is only one rationalist

explanation for war, asymmetric information, or uncertainty.

8. Goddard (2006), for example, argues that elites choose legitimation strategies that may

make territory indivisible. That is, indivisibility is a product of social construction not

psychological attachment. Nevertheless, indivisible legitimation strategies seem to be

principally motivated by domestic politics and occur in territories where coethnics reside.

9. For a detailed discussion of this variable, we refer readers to Uzonyi, Souva, and Golder

(2012). The one or higher cut point means some autocracies are considered capable of

generating audience costs. We also measured the variable audience costs as equal to one

if and only if a state scored the maximum value of 3 on the Uzonyi, Souva, and Golder

Moon and Souva 455

(2012) index. This essentially limits the measure to full democracies. Our empirical find-

ings are the same.

10. This specification differs in minor ways from Downes and Sechser’s model. We use the

Uzonyi, Souva, and Golder (2012) measure of audience cost capacity instead of a binary

measure of democracy based on the Polity data; drop variables for the target’s regime

type and joint democracy as the theory does not call for the effects of the challenger’s

audience costs to be conditioned by the target’s regime type; and replace the four individ-

ual issue variables with a single binary one indicating the presence of a territorial dispute

involving a credible commitment problem.

11. We also estimated a two-stage censored selection model to address the possibility that the

process generating MCT threats is related to the process affecting the outcome of such a

threat. We use the same selection model as we do with the MID data reported in Table 2.

Although we find a statistically significant r parameter, our findings in the outcome

model are the same as those reported in Table 1. Our findings are the same if we limit

the empirical domain to the post–World War II era, 1946–1995, or if we examine the lon-

ger time period but drop the World War II variables. Results for these analyses are avail-

able in the Online Appendix.

12. Specifically, the variable MID Reciprocation equals one when the Correlates of War hos-

tility index score for the target (cwhost2) is greater than one.

13. In sensitivity analyses, we examined an alternative measure of MID escalation, namely,

whether a dispute had at least twenty-five fatalities. None of our results change. We also

examined the period 1919 through 1995. All of the central findings are the same. Full

model results are in the Online Appendix.

14. We focus on the interaction term because Gelpi and Griesdorf do. Downes and Sechser

(2012) note that Gelpi and Griesdorf do not include all of the constituent terms. Doing so

does not change the substantive conclusions; these results are available in the Online

Appendix.

15. Our findings with the ICB data are substantively the same if we limit the empirical

domain to the post–World War II era, 1946–1995.

16. See especially Wolford, Reiter, and Carubba (2011).

Supplemental Material

The online [appendices/data supplements/etc] are available at http://jcr.sagepub.com/supplemental.

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Audience Costs, Information, and Credible Commitment Problems

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