Endogenous military strategy and crisis bargaining

When states fight wars, they choose between multiple military strategies, e.g. whether to place boots on the ground or restrict efforts to an air campaign. We modify the standard crisis bargaining model to account for this by endogenizing a state's war strategy. Intuitively, states choose the more powerful strategy when the additional strength gained covers the additional costs of doing so. However, there is a counterintuitive second-order consequence of this. When stronger campaigns are expensive but still credible, states are more likely to reach a negotiated settlement to avoid the corresponding high costs. As the cost of the more powerful option increases, states substitute their actions with cheaper but weaker alternatives. Because of these lower costs, states become less likely to reach a settlement. In some cases, both parties may be worse off as a result.