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Four Costly Signaling Mechanisms Reveal Credibility Boost Beyond Sunk Costs


costly signaling
installment costs
reducible costs
credibility
International Relations
APSR
1 Stata files
1 datasets
Dataverse
Four Costly Signaling Mechanisms was authored by Kai Quek. It was published by Cambridge in APSR in 2021.

Credibility problems in international relations often arise when states' commitments appear uncertain. This research introduces four mechanisms of costly signaling—installment costs and reducible costs alongside the established sinking costs and tying hands approaches—to address these challenges.

Signaling Solutions: Four Costly Mechanisms

• Sinking Costs: High, irreversible investments that demonstrate commitment (known)

• Tying Hands: Permanent resource dedication to signal resolve (known)

• Installment Costs: Sequential commitments with escalating stakes

• Reducible Costs: Partial costs that can be reversed under specific conditions

The findings show that costly signaling works best when credibility is the goal, and each mechanism offers distinct approaches. Importantly, reducible costs improve credibility even at low levels—a counterintuitive result.

Experimental Validation of Signaling Mechanisms

Our experiments demonstrate how these four mechanisms influence perceptions of commitment in international relations scenarios.

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