Risky but Rational: War as an Institutionally Induced Gamble

Abstract

We present and process-trace a complete information model of diversionary war. In our model, leaders must retain the support of some fraction of a selectorate whose response in turn depends on the outcome of an international conflict. The need to retain the loyalty of a segment of the selectorate generates institutionally induced risk preferences in leaders. Under specified conditions, this in turn results in the leaders’ choice of risky options and war emerges as a rational gamble. We analyze when the leader prefers to impose such a gamble, what the optimal gamble would be, and its effect on crisis bargaining between two leaders. We find that when leaders have institutionally induced risk preferences, whether leaders rationally choose to initiate or continue a war can depend on which selectorate cares most about the outcome of the conflict. A reexamination of the bargaining over a settlement to end the First World War in December 1916–January 1917 and Germany's contemporaneous consideration of unrestricted submarine warfare allows us to demonstrate the empirical relevance of the model.