Rational Resignations

Abstract

Under what conditions is the threat of resignation a powerful bargaining instrument? This article draws on the theory of games to show how the ranking of actor preferences and the assignment of rules concerning the decision-making process to strategic interaction can generate games that allow us to explain bargaining outcomes. A major limitation of game theory, however, is that it assumes all actors are equally motivated to play. A model is developed to show how actors may try to influence other actors' perceptions of their willingness to play in order to extract concessions. The model is applied in two distinct national settings: (a) the resignation of Mario Vargas Llosa from the Peruvian Democratic Front in an effort to force his coalition partners to bow to his demands or accept the division of the coalition and (b) the resignation of Philippine politician Salvador Laurel from the Aquino coalition in order to overcome the resistance of Aquino's allies to the predominance of his party within the anti-Marcos coalition. These events, and the bargaining that followed them, shared a common strategic logic. In both cases carefully reasoned resignations were withdrawn, and the respective coalitions consolidated, once initial demands were met.