The non-credible threat is a strategy that youngsters learn very early in life and many hone the skill into true art. They learn that they can get their way on occasion if they make a threat to do something that would be essentially self-destructive. An example might be a child who threatens to hold his breath until he passes out unless the parent gives him what he wants. He probably wouldn’t go through with it, but one never knows. That’s why it is effective.
Parents use it on children as well. The parent might threaten, “If you don’t behave right now, we’ll just go right straight home.” If you are visiting Disneyland, this might not be completely believable, but maybe the child doesn’t really want to push his luck.
In game theory, the non-credible threat can be modeled as a simple two-stage game. First player two threatens. Then player 1 plays either “capitulate” or “non-capitulate”. If player 1 plays “non-capitulate”, then player 2 plays either “accept” or “reject”. Here are the possible payoffs for each player (player 1, player 2):
1. (c): ( 1 , 2 )
2. (n, a): ( 2, 1 )
3. (n, r): ( -10, -10)
If they play the “non-credible threat” game only once, it is clearly irrational for player 2 to actually carry out the threat and reject the offer player 1 makes if he chooses non-capitulate. But here is where it gets interesting: suppose everyone knows that player 2 is a hothead and not at all likely to use reason. Then they may believe that he/she will actually play “reject” and therefore decide it is best to capitulate. The point is that “irrationality” is rational if one plays the game often enough.
A common application in economics is a company that has a monopoly in a market and another firm attempts to enter. The monopolistic firm can threaten to start a price war if the second firm enters. The second firm can get $1M if it stays out of the market and the monopolistic one gets $5M, or $2M if the firm enters and the monopoly decides to split the market and get $2M as well. If however it sparks a price war, both firms get $1M. Firm two's best option is to enter and hope firm one would likely share the market, the low payoff for staying out and the worse payoff of a price war averted.
In my relation to politics, suppose someone prefers a quazi-conservative like Mc Cain( for what-ever reason) to say Newt or a more actual conservative type, but probably realizes Hillary would be a complete and utter disaster for everyone including themselves. He might threaten to vote for Hillary in the general election if Republicans don't nominate McCain in the primaries.
Of course, in this example it relates to what a person's percieved payoff would be for each of the candidates,and in reality I think Newt would be a better payoff for everybody than Mc Cain or Hillary for sure, but let's say for this example this guy's actual preference or percieved benefit is Mc Cain over Newt over Hillary and my preference is Newt over Mc Cain over Hillary. Give Newt the nomination and he will not carry out his threat to vote for Hillary, thus Mc Cain and Hillary averted.
The point I want to make is that the person making the non-credible threat is really just a bully. He or she is trying to influence your life in a way that is unacceptable. And it is easy enough for people to kill off this nasty practice: throw the non-credible threat right back at the person making the threat. You can say: “okay, fine, I actually do want to see the Hillary as President.” We can stop the non-credible threats by simply insisting on resisting them. This is the point about non-credible threats, they often hurt the person doing the threatening. If he or she knew that no one would ever capitulate, they would never make the threats in the first place.
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