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Inverse View
It is not the case that The threat to build a sewage disposal plant is incredible and should be ignored by the threatened party.
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Reasons For
2 perspectives
Reason for 1 of 2
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1.
Agents can credibly commit to seemingly irrational threats by visibly delegating execution authority to a party with different interests (Schelling, 'The Strategy of Conflict', 1960).
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2.
Once commitment devices are in place, the threatener's dominant strategy shifts such that execution becomes rational, restoring credibility.
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Reason for 2 of 2
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1.
Reputation effects across repeated interactions make executing costly threats rational, as Kreps and Wilson's 1982 'reputation model' demonstrates.
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2.
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 Against
1 perspective
Reason against
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1.
If the landowner refuses to sell, carrying out the threat would damage the threatener as well as the threatened party.
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2.
It is not in the threatener's interest to carry out a threat that harms themselves.
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3.
A rational agent will not execute a threat whose execution is against their own interest.
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