SITE Seminar | Credible threats
Welcome to the first SITE Seminar of the fall! We kick off the semester on August 19, 2025, with a presentation by Martin Dufwenberg (Purdue University), who will share insights from the study “Credible Threats,” co-authored with Flora Li and Alec Smith. Drawing on a belief-dependent anger model and experimental evidence, the research shows how communicated threats influence expectations and behavior—leading to greater deterrence and increased costly punishment in strategic settings.
Working paper: Credible Threats
By: Martin Dufwenberg, Flora Li, and Alec Smith
Abstract
We study the effect of communication on deterrence and costly punishment. We show that a theoretical model of belief-dependent anger captures the relationship between messages, beliefs, and behavior and implies that threats can generate credible commitments. We test our model in a between-subjects experiment with belief elicitation where one-sided communication is available as a treatment. The evidence supports the theory, demonstrating that communicated threats change beliefs and payoff expectations and lead to greater rates of costly punishment. Threats successfully deter co-players from exploiting the strategic environment to their advantage.
Photo: Tapati Rinchumrus, Shutterstock