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Inverse View
It is not the case that A threatener who accepts short-term loss to punish defection gains long-run credibility, making the threat genuinely rational to carry out.
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Reasons For
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1.
Reputation-building assumes rational adversaries who update beliefs based on past behavior, but many real conflicts involve emotional, ideological, or economically irrational actors.
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2.
The claim conflates individual rationality with strategic rationality: a single costly punishment may be rational *ex post* while remaining irrational *ex ante* given uncertainty about future interactions.
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3.
Credibility can be established through cheap signals (transparent constraints, institutional commitments) without actually incurring losses, making costly punishment instrumentally wasteful.
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Reasons Against
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Reason against
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1.
Reputation effects compound over time: if threateners build credibility through costly punishment, future threats require fewer actual executions, yielding net long-term gains.
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2.
Rational agents must sometimes incur costs to maintain a credible commitment device, just as firms invest in brand reputation despite short-term expense.
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3.
Without willingness to absorb losses when executing threats, all threats become non-credible cheap talk, eliminating deterrence entirely and inviting exploitation.
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