The typology of security commitments presented in the previous chapter shows that leaders makedifferent kinds of promises to allies. The variety of commitments formed in practice suggests that anumber of factors, in addition to simple defense, motivate decisions about how to designcommitments. One such factor is moral hazard, which is an incentive problem thatoccurs when an actor is emboldened to behave aggressively because it is insulated from the risks ofits own actions. An alliance pledging to provide military assistance to an alliance member may detera prospective adversary from attacking the member, but that same commitment might also embolden theleader of the protected state to take actions that risk provoking the adversary and causing violentconflict, because it knows that the cost of its defense will be shared with its allies. Failing tobalance deterrence and the risks of moral hazard can actually lead to the very outcome the thirdparty hoped to prevent. How can the third party resolve this dilemma and design a securitycommitment that achieves both objectives? In this chapter and in Chapter 5, I develop a contracttheory of alliance commitments that explains why a third party's intervention in an internationalcrisis might affect disputants’ behavior and how the third party's anticipation of thisbehavior shapes its choice of the types of promises to make.