The Might of the Pen: A Reputational Theory of Communication in International Disputes

I present a theory of effective diplomacy based on honesty and reputations. I model diplomacy as a form of “cheap talk” and international interactions as an infinitely repeated game in which similar states find themselves in disparate situations over time. The theory explains the success and failure of diplomacy. Reputations for honesty make honest communication possible. A state caught bluffing is less able to communicate and less likely to attain its goals in the near future. These findings imply that domestic audience costs are unnecessary for international signaling and that military strength is not the only way to build credibility.