Inspiring Regime Change1 Stephen Morris2 Mehdi Shadmehr3 1We are grateful for comments of Nemanja Antic, Dan Bernhardt, Raphael Boleslavsky, Georgy Egorov, Alex Jakobsen, Stefan Krasa, Elliot Lipnowski, Dimitri Migrow, Konstantin Sonin, seminar participants at the 2016 Columbia Conference on Political Economy, 2017 North American Summer Meeting of the Econometric Society, 2017 Wallis Institute Annual Conference on Political Economy, 2018 North American Winter Meeting of the Econometric Society, 2019 Midwest Political Science Association (MPSA) Meeting, 2020 AEA Annual Meeting, University of Chicago, University of Illinois, University of Michigan, University of Central Florida, University of Miami and Queen's University, and the discussions of Brenton Kenkel at MPSA, Mehmet Ekmekci at ASSA, Scott Tyson at the Wallis conference, and Alex Debs at the Columbia conference. We have received excellent research assistance from Elia Sartori. An earlier version of this paper circulated under the title \Reward and Punishment in a Regime Change Game." 2Department of Economics, MIT. Email:
[email protected] 3Harris School of Public Policy, University of Chicago, and Department of Economics, University of Calgary. E-mail:
[email protected] Abstract We conceptualize the process of inspiring regime change, characterize the optimal inspiration strategy, and study its consequences. Drawing from the literature, we formalize the process of inspiring regime change as a mechanism, in which a leader assigns psychological rewards to different anti-regime actions. Citizens face a coordination problem in which each citizen has a private, endogenous degree of optimism about the likelihood of regime change. Because more optimistic citizens are easier to motivate, optimal inspiration entails optimal screening: a mech- anism to implicitly parse citizens based on their degree of optimism.