The Interaction Effects of Bargaining Power: The Interplay Between Veto Power,Asymmetric Interdependence,Reputation, and Audience Costs

In international relations, different rationalistic theories have developed to explain negotiators’ behavior and the outcomes of negotiations. The compatibility and interaction effects between the different forms of bargaining power, however, remain unexplored. In this article, I seek to fill this gap by connecting four rationalistic concepts of bargaining power: veto power, asymmetric interdependence, reputation, and audience costs. By showing that domestic veto players are only semiveto players in international politics – because they can veto an improvement but not a deterioration of the status quo – threats based on asymmetric interdependence to disrupt a mutually beneficial cooperative relationship can be connected to veto power; the incompatibility of the factors concerned would otherwise make this impossible. The combination of veto power and asymmetric interdependence, however, raises a theoretical question: Will rational actors ever approve a deterioration of the status quo? Theories of reputation and audience costs can help answer this question. According to these approaches, threatening parties suffer ex post costs when they back down from their own threats. This theoretical analysis sheds new light on how different forms of bargaining power interact with each other and also helps to address some of the theoretical inconsistencies of the original individual concepts. Finally, this analysis suggests some of the weaknesses of empirical studies that have neglected these interaction effects.