Mutual Optimism as a Cause of Conflict: Secret Alliances and Conflict Onset∗ Muhammet A. Basy Robert Schubz Abstract Mutual optimism arising from two sides holding divergent estimates of their relative bar- gaining power is a prominent theoretical explanation for interstate conflict. This paper devel- ops a theory of mutual optimism in which conflicting bargaining power estimates arise from asymmetric information about which, if any, third parties will join either side in a military dis- pute. We contend that secret alliances can generate mutual optimism which increases the prob- ability of conflict. By exploiting secret alliances as a measurable source of private information, we provide the first systematic test of mutual optimism that directly assesses a state’s secret capabilities. Optimism is present when a state’s secret allies are more numerous or powerful than anticipated by opponents. Our empirical tests and numerous robustness checks strongly support the theoretical expectation. We conclude that mutual optimism is an empirically, as well as theoretically, important cause of interstate conflict. ∗For helpful discussions and feedback, we are grateful to Songying Fang, Ashley Leeds, Kris Ramsay, Anne Sartori, Beth Simmons, Dustin Tingley, Robert Trager, and Alex Weisiger. Additionally, we thank participants at the 2014 Annual Meeting of the Midwest Political Science Association, the 2014 Annual Meeting of the Peace Science Society, and the 2015 Empirical Implications of Bargaining Theory Conference at Princeton. yDepartment of Government, Harvard University.
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[email protected]. In the summer of 1990 before the Gulf War, representatives from Iraq and Kuwait approached their negotiations in Jeddah with divergent expectations regarding how the US would respond to conflict.