Delegating decisions to agents makes threats more credible

Evidence

Insurance schemes permit the sharing of interests; the insurance company has a different incentive structure from the insured party and may be better able to make threats or resist them for that reason. Requiring several signatures on a check accomplishes a similar purpose. The use of a professional collecting agency by a business firm for the collection of debts is a means of achieving unilateral rather than bilateral communication with its debtors and of being therefore unavailable to hear pleas or threats from the debtors. Providing ammunition to South Korean troops or giving them access to prisoner-of-war camps so that they can unilaterally release prisoners is a tactical means of relinquishing an embarrassing power of decision—embarrassing because it subjects one to coercive or deterrent threats or leaves one the capacity to back out of his own threat, hence the incapacity to make the threat persuasive. — Thomas C. Schelling, The Strategy of Conflict, 330

Categorization

• XREF: Core to the reader’s analytical frame — the third-party enforcer (Gambetta’s mafioso, Milgrom’s private judge) works precisely by being structurally unavailable to hear pleas, which is the credibility mechanism behind Godfather-bonds. — connects to: Hinted threats gain credibility precisely because they are deniable — Thomas C. Schelling, The Strategy of Conflict, 781; Credible threats can require revealing information that defeats the threat — Thomas C. Schelling, The Strategy of Conflict, 801; Institutional reputation makes threats more credible than individual threats — Thomas C. Schelling, The Strategy of Conflict, 80 (+2 more)

Related

• Selecting visibly irrational agents can make threats credible (similarity 0.81)
• Credible threats can require revealing information that defeats the threat (similarity 0.80)
• Institutional reputation makes threats more credible than individual threats (similarity 0.79)

Broader Connections

• Selecting visibly irrational agents can make threats credible #corroborates (0.90) — Thomas C. Schelling, The Strategy of Conflict, 332
• A fulfilled threat gains credibility from its value to future threats, not present gain #expands (0.78) — Thomas C. Schelling, The Strategy of Conflict, 83