credible threat and commitment
A parent who says 'one more tantrum and we go straight home' has power only if the child believes it. If everyone knows the parent would never really abandon a fun outing, the threat is empty and the tantrums continue. Strategy is full of this problem: a threat or a promise only shapes others' behavior if they believe you will actually follow through. A credible threat is one it would genuinely be in your interest to carry out when the moment comes; commitment is the art of making your threats and promises believable, often by deliberately tying your own hands.
The deep idea, made famous by Thomas Schelling, is that having fewer options can make you stronger. A threat is credible only if carrying it out is the threatener's best move at that point — which backward induction checks by looking ahead to the moment of truth. If retaliating would hurt you more than backing down, your threat is not credible and a clever rival will ignore it. The fix is a commitment device: an action taken in advance that removes your tempting escape route, so that following through becomes your rational choice. Burning your ships so your army cannot retreat, signing a contract with stiff penalties, or building so much factory capacity that a price war is clearly worth fighting — all make a threat or promise believable precisely by making the soft option impossible.
Credibility and commitment run through deterrence, negotiation, monetary policy, and business strategy. A central bank that legally commits to an inflation target is more believed than one that merely promises; a firm that visibly invests in huge capacity deters entry more effectively than one that merely warns rivals away. The paradox at the heart of it all: limiting your own freedom of action, which sounds like weakness, is often the surest source of strategic strength.
A general orders his army across a river and burns the only bridge behind them. Retreat is now impossible, so the soldiers will fight with everything they have — and the enemy, seeing there is no bluff, may not even risk attacking. By destroying his own escape route, the general made his resolve credible.
Burning the bridge behind you: removing your own retreat turns a threat into a credible one.
A threat you would not actually carry out is non-credible and will be ignored by a rational rival. Credibility usually has to be bought in advance with a costly, hard-to-reverse commitment — words alone are cheap.