DOMESTIC POLITICAL AUDIENCES AND THE ESCALATION OF INTERNATIONAL DISPUTES

International crises are modeled as a political ''war of attrition'' in which state leaders choose at each moment whether to attack, back down, or escalate. A leader who backs down suffers audience costs that increase as the public confrontation proceeds. Equilibrium analysis shows how audience costs enable leaders to learn an adversary's true preferences concerning settlement versus war and thus whether and when attack is rational. The model also generates strong comparative statics results, mainly on the question of which side is most likely to back down. Publicly observable measures of relative military capabilities and relative interests prove to have no direct effect once a crisis begins. Instead, relative audience costs matter: the side with a stronger domestic audience (e.g., a democracy) is always less likely to back down than the side less able to generate audience costs (a nondemocracy). More broadly, the analysis suggests that democracies should be able to signal their intentions to other states more credibly and clearly than authoritarian states can, perhaps ameliorating the security dilemma between democratic states.