TY  - JOUR
AU  - Eaton,Jonathan
AU  - Engers,Maxim
TI  - Sanctions
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3399
PY  - 1990
Y2  - July 1990
UR  - http://www.nber.org/papers/w3399
L1  - http://www.nber.org/papers/w3399.pdf
N1  - Author contact info:
Jonathan Eaton
Department of Economics
Penn State University
608 Kern Graduate Building
University Park, PA 16802-3306
Tel: (814) 865 - 8871
Fax: (814) 863 - 4775
E-Mail: jxe22@psu.edu
AB  - Sanctions are measures that one party (the sender) takes to influence the actions of another (the target). Sanctions, or the threat of sanctions, have been used, for example, by creditors to get a foreign sovereign to repay debt or by one government to influence the human rights, trade, or foreign policies of another government. Sanctions can harm the sender as well as the target. The credibility of such sanctions is thus at issue. We examine, in a game-theoretic framework, whether sanctions that harm both parties enable the sender to extract concessions. We find that they can, and that their thrust alone can suffice when they are contingent on the target's subsequent behavior. Even when sanctions are not used in equilibrium, however, how much compliance they can extract typically depends upon the coats that they would impose on each party.
ER  -