Coercion and Power

Incentive Structures

Generally speaking, we can say that one agent, agent A, can get another, agent B, to do something that B would not otherwise do by changing B's incentive structure. Thus, the power, or social power, of one agent A over another agent B is the ability of A to deliberately alter the incentive structure of B. We say deliberately because A might alter the incentive structure of B without intending to do so. Indeed, to a minor extent we can do all sorts of things that change the incentive structures of others without intending to. Buying the last cake in a shop means the next person has to buy something else instead, but we do not ordinarily consider such market activity to be acts of power, let alone coercion.

Incentive structures can be altered in four main ways. First, persuasion: agent A might persuade B that an option in B's opportunity set is not what it might appear, so raising or lowering it in B's estimation. Second, A might make a side payment to B, thus making one alternative more valuable because it also comes with an extra reward. In the literature, this is usually called an offer. Third, A might make a negative side payment to B, thus lowering an alternative in the estimation of B. Here, A will ensure that if B makes a particular choice B must also suffer a cost. In the literature, this is usually called a threat. Finally, agent A might combine an offer with a threat, simultaneously lowering one alternative and raising another alternative. In the literature, this fourth possibility is usually called a throffer—a combination of a threat and an offer. We can see how these work by considering B's opportunity set, represented here as three alternatives within a set {N}.

...