War's inefficiency puzzle
Encyclopedia
War’s inefficiency puzzle is a research question
asking why unitary-actor states would choose to fight wars when doing so is costly. James Fearon
’s Rationalist Explanations for War and Robert Powell
's In the Shadow of Power, which launched rational choice theory
in international relations
, provide three possible answers: overly optimistic beliefs, commitment problems, and issue indivisibility.
Thus, using John Von Neumann
and Oskar Morgenstern
expected utility functions, Fearon finds the expected utility for war for states A and B, which are PA - CA and (1 - PA) - CB, where PA is A's probability of winning a war, CA is A's costs for war (proportional to how much they value the utility), and CB is B's costs for war (proportional to how much they value the utility). With simplification, if X is A's share of a peaceful settlement, Fearon finds that peace is better than war when PA - CA < X < PA + CB. A satisfactory X does not exist only if PA + CB < PA - CA, or CA + CB < 0. But CA, CB > 0 by definition. Hence, this is a contradiction.
The question is why two rational states cannot find an X that satisfies both sides, even though one must always exist and war is the worst payoff for both sides.
But Fearon points out that this is not a completely rational explanation for war. Recall that war is the worst payoff for both sides. Consequently, states actually have incentive to reveal how powerful they are to the other side, as to avert the costs of war. The problem with such information transmission is that states actually have incentive to overrepresent how powerful they are. Generally speaking, a state that is extremely powerful will receive a better settlement than an extremely weak one. Thus, a state has incentive to look powerful to try to coerce a good peaceful settlement even if it comes at the risk of falling into war. This prevents the states from credibly revealing how powerful they are to each other.
, an explanation for World War I
, roughly makes this argument.) Second, if one side is slowly getting more powerful as a function of time, then the declining power may receive a better distribution of the stakes by fighting a preventive war
now rather than having to accept a peaceful settlement later. (The rising power still has incentive to negotiate when it reaches its peak power because war is costly.)
Research question
A research question is the methodological point of departure of scholarly research in both the natural sciences and humanities. The research will answer any question posed...
asking why unitary-actor states would choose to fight wars when doing so is costly. James Fearon
James Fearon
James D. Fearon PhD is the Theodore and Francis Geballe Professor of Political Science and Chair of the Department of Political Science at Stanford University, known for his work on the theory of civil wars, international bargaining, war's inefficiency puzzle and audience costs.Fearon's work on...
’s Rationalist Explanations for War and Robert Powell
Robert Powell
Robert Powell is an English television and film actor, probably most famous for his title role in Jesus of Nazareth and as the fictional secret agent Richard Hannay...
's In the Shadow of Power, which launched rational choice theory
Rational choice theory
Rational choice theory, also known as choice theory or rational action theory, is a framework for understanding and often formally modeling social and economic behavior. It is the main theoretical paradigm in the currently-dominant school of microeconomics...
in international relations
International relations
International relations is the study of relationships between countries, including the roles of states, inter-governmental organizations , international nongovernmental organizations , non-governmental organizations and multinational corporations...
, provide three possible answers: overly optimistic beliefs, commitment problems, and issue indivisibility.
The puzzle
Fearon has three basic assumptions about war. First, war is a more costly choice than peace. This is pretty straightforward since war destroys infrastructure and kills people. Second, war is predictably unpredictable. In other words, although neither side may be sure exactly who will win, they can agree on the relatively likelihood each will win. And third, there are no direct benefits from fighting.Thus, using John Von Neumann
John von Neumann
John von Neumann was a Hungarian-American mathematician and polymath who made major contributions to a vast number of fields, including set theory, functional analysis, quantum mechanics, ergodic theory, geometry, fluid dynamics, economics and game theory, computer science, numerical analysis,...
and Oskar Morgenstern
Oskar Morgenstern
Oskar Morgenstern was a German-born Austrian-School economist. He, along with John von Neumann, helped found the mathematical field of game theory ....
expected utility functions, Fearon finds the expected utility for war for states A and B, which are PA - CA and (1 - PA) - CB, where PA is A's probability of winning a war, CA is A's costs for war (proportional to how much they value the utility), and CB is B's costs for war (proportional to how much they value the utility). With simplification, if X is A's share of a peaceful settlement, Fearon finds that peace is better than war when PA - CA < X < PA + CB. A satisfactory X does not exist only if PA + CB < PA - CA, or CA + CB < 0. But CA, CB > 0 by definition. Hence, this is a contradiction.
The question is why two rational states cannot find an X that satisfies both sides, even though one must always exist and war is the worst payoff for both sides.
Information problems
One obvious reason is that each state simply believes it is more powerful than it really is. For example, two states that each believe they are infinitely powerful would have a difficult time bargaining with each other. War, then, can erupt with incomplete information regarding the distribution of power.But Fearon points out that this is not a completely rational explanation for war. Recall that war is the worst payoff for both sides. Consequently, states actually have incentive to reveal how powerful they are to the other side, as to avert the costs of war. The problem with such information transmission is that states actually have incentive to overrepresent how powerful they are. Generally speaking, a state that is extremely powerful will receive a better settlement than an extremely weak one. Thus, a state has incentive to look powerful to try to coerce a good peaceful settlement even if it comes at the risk of falling into war. This prevents the states from credibly revealing how powerful they are to each other.
Commitment problems
Fearon also finds that both states can prefer fighting with complete information when under situations with shifting power. There are two versions of this. First, when there are sufficiently great advantages for striking first, then neither side can credibly commit to any distribution of the stakes. (The cult of the offensiveCult of the offensive
Cult of the offensive refers to a strategic military dilemma, where leaders believe that offensive advantages are so great that a defending force would have no hope of repelling the attack; consequently, all states choose to attack...
, an explanation for World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, roughly makes this argument.) Second, if one side is slowly getting more powerful as a function of time, then the declining power may receive a better distribution of the stakes by fighting a preventive war
Preventive war
A preventive war or preventative war is a war initiated to prevent another party from attacking, when an attack by that party is not imminent or known to be planned. Preventive war aims to forestall a shift in the balance of power by strategically attacking before the balance of power has a chance...
now rather than having to accept a peaceful settlement later. (The rising power still has incentive to negotiate when it reaches its peak power because war is costly.)