Secrecy and War: The Origins of Private Information

This paper shows why states, acting in their own self-interest, may create informational asymmetries that lead to war. In our model, two actors with no private information invest in military capacity before engaging in crisis bargaining. If bargaining fails, the states go to war, and the payoffs of a war depend on the two states' military capacities. We show that the states have incentives to keep each other guessing about their exact levels of capacity -- even though doing so creates the risk of war. Thus, self interest and strategy are to blame for war. Our paper explains two stylized facts: States devote considerable resources to secrecy in the national-security realm, and often disagree about the balance of capabilities.