Home

2.3.6 Promises and Threats

May 17, 2012
2-3-6_money_gun.jpg
"You can make the enemy come to you." Offer him an advantage." You can give the enemy no advantage in coming to you." Threaten him with danger."
Sun Tzu's The Art of War 6:1:5-8
Description: 
Sun Tzu's six rules on the use of promises and threats as strategic moves.
Perspective: 
“But as the arms-control scholar Thomas Schelling once noted, two things are very expensive in international life: promises when they succeed and threats when they fail.” Don Piatt
Situation: 

Competition requires building up positions. This requires us to maximize our resources. In The Art of War, Sun Tzu constantly warns that we must judge people's intentions by their actions, especially when people communicate their commitment to future actions. We all communicate commitments in order to encourage people to act in a way that we desire today in order to get a reward or avoid a punishment tomorrow. The problem at the heart of any commitment is our believability. Making a threat or promise is easy, executing either commitment is costly. Making good on a threat requires punishing someone. Making good on a promise rewards someone. Both are costly to us.

Opportunity: 

Leveraging information is the least costly way to build up a position. The main alternative, making physical moves, is much more costly. Our opportunity is to leverage the inexpensive threat or the promise in a way that eliminates the more costly forms of effort (3.6 Leveraging Subjectivity). If a threat is believed, we reduce our costs because we never have to act on it. If a promise is trusted, the cost of honoring is less than the value we gain both in the current situation and future interactions.

Sun Tzu's Rules: 

The following six rules describe the use of threats and promises from the perspective of Sun Tzu.

  1. We threaten to increase the perception of the costs of doing what we don't want. Threats can help people avoid mutually destructive situations that would otherwise attract them. A threat would not be necessary if a move in a given situation did not potentially return benefits to one party at the expense of other (3.1.3 Conflict Cost).
  2. We promise to increase the rewards of doing what we desire. Promises can help people achieve to mutually beneficial situations otherwise unavailable to them. A promise would not be necessary if a move was not more costly to one party that the other party. The reward balances the costs and rewards for both parties (3.1.2 Strategic Profitability).
  3. Both threats and promises depend totally on their communication and credibility. Threats and promises must be heard and they must be believed. The most important aspect in being believed is our history. People judge our future behavior by our past behavior, or, as we say, our position is path with a history, not a disconnected point (1.1 Position Paths).
  4. In using threats and promises, others must believe that we are willing to sacrifice our future flexibility. After the fact, executing a punishment or delivering a reward is going to be costly to us, so at that point in time, we would rather not do it. As Thomas Shelling wrote in The Strategy of Conflict expresses, "The power to constrain an adversary depends upon the power to bind oneself." While these two ideas seem like opposites, they are actually two sides of the same coin (3.2.3 Complementary Opposites).
  5. Threats are better used for deterrence. When successful, the undesirable action is deterred and the cost of extracting punishment is deferred. Threats designed to compel action encourage the minimum possible compliance and invite sabotage (2.3.1 Action and Reaction).
  6. Promises are better used to encourage an action. When successful, the costs of the reward has already been "paid for" by the desired action. Promises designed to deter an action indefinitely require continuous payments for  uncertain future rewards (2.3.2 Reaction Unpredictability).
Illustration: 

Let us draw today's illustration from a little different competitive arena, parenting a teenager.

  1. We threaten to increase the perception of the costs of doing what we don't want. We threaten to "ground" a teenager if they do not honor their curfew.
  2. We promise to increase the rewards of doing what we desire. When we care more about getting A's than our teen does, we can promise are reward, such as extending driving privileges, for each "A's."
  3. Both threats and promises depend totally on their communication and credibility. The teen needs to know the curfew and the punishment and trust that we will actually enforce it.
  4. In using threats and promises, others must believe that we are willing to sacrifice our future flexibility. If the curfew is violated, we cannot suspend the grounding for "special events" or to relieve ourselves from constant nagging. If driving privileges are won by good grades, we must give up our own access to the vehicle during those times.
  5. Threats are better used for deterrence. The threat works to deter staying out as long as the teen desires.  
  6. Promises are better used to encourage an action. The promise works to encourage more studying