Boycotts, Power Politics, or Trust Building: How to Prevent Conflict?

In a game of imperfect information, the paper analyses whether different types of intervention by third parties can ensure that political (ethnic, religious, social, etc.) groups within a country will pursue a cooperative strategy and how easy it is to predict their effects. We conclude that a strong boycott is the only instrument that is always effective and that trust building, although currently widely acclaimed by, e.g., the United Nations, is not only less effective but difficult to predict and – like power politics – can favour one group at the expense of the other. (JEL: C 72, D 74)