Assistant professor at UVA
Using a game-free approach, I study crisis bargaining games with uncertainty about the common value of the contested object, or stakes. I show that, under mild conditions, there is no crisis bargaining game with uncertain stakes in which transfers can remedy a bargaining failure caused by an indivisibility of the object's value. The impossibility contradicts conventional wisdom and does not hold for the standard sources of uncertainty: power and the costs of war. Uncertainty about stakes breaks the equivalence between allocating shares and exchanging transfers, such as side payments or concessions on other issues, whereas the standard sources preserve that equivalence. Whether states are unable to reach an agreement or maintain it depends on whether the indivisibility is at the boundary or the interior of the bargaining space. I also show that correlated information can exacerbate the problem by amplifying demands when stakes are thought to be high.