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Listen to this, or you'll be dead sorry. Incentives for ambiguous threats.

Conflict
Organised Crime
Political Violence
Political Activism
State Power
Anna Pauls
Universitetet i Oslo
Anna Pauls
Universitetet i Oslo

Abstract

Both criminal organisations and secret services occasionally send bold but ambiguous threats. Dead fish (mafia) or misplaced chairs (Securitate), found upon coming home, are not just uncanny, but a threat. They are not just credible messages that one is not safe but a clear announcement that punishment is going to ensue unless one acts on the sender’s behalf. Now, what exactly is demanded is not specified. Why not always tell the recipient precisely what is expected from them? After all, costly loss of reputation if a threat is not followed through when an exactly specified demand is not met can make the threat credible and enforce highest possible effort from the recipient on the sender’s behalf. But this cost can be a double-edged sword when the sender is uncertain about the level of effort the recipient is able to provide, either in terms of performing an action such as spying on fellow dissidents or abstaining from a dissident action whose exact character and degree of harm is unknown to the sender. A simple game shows that, even when demanding high effort can ensure compliance, the sender may prefer imprecise demands when reputation loss is sufficiently costly and likely and cannot be mitigated enough through punishment. This holds when punishing the recipient is costly, and a recipient with high ability but who provides low effort is an unfaithful servant who constitutes a costly liability. Then, a semi-separating PBNE exists in which the sender does not specify the desired effort level, the sender mixes between punishing and not punishing low effort, and the high ability recipient mixes between high and low effort. When reputaion loss is very likely and especially costly, high effort is not an equilibrium outcome in the subgame in which the sender specifies a desired effort level and only an imprecise message makes high effort possible at all. This demonstrates how criminal organisations and regimes not bound by rule of law may in some circumstances use opaqueness to make reluctantly recruited informers internalise control and provide high effort, at a lower cost. On a wider level, vague laws applicable to dissident activity, for example those criminalising “incitement of anger” may fulfil a similar function.