A Reputational Model of Conflict: Why Die to Win?

Abstract

This paper considers a simple model of zero-sum conflict between

two players ( e.g., territorial dispute) in which costly actions ( e.g.,

terrorism) are available to one side. We identify how reputation

effects shape the outcome of such conflict. A small prior of fanatic

commitment type induces the possibility of costly attack followed by

withdrawal in equilibrium. The chance of withdrawal is proportional

to the self-inflicted cost of attack.