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Strategic Interaction and Interstate Crises: A Bayesian Quantal Response Estimator for Incomplete Information Games

Published online by Cambridge University Press:  24 February 2008

Justin Esarey*
Affiliation:
Department of Political Science, Florida State University, 556 Bellamy Building, Tallahassee, FL 32306
Bumba Mukherjee
Affiliation:
Department of Political Science and Department of Economics and Econometrics, 407 Decio Hall, University of Notre Dame, South Bend, IN 46556, e-mail: bumba_mukherjee@nd.edu
Will H. Moore
Affiliation:
Department of Political Science, Florida State University, 561 Bellamy Building, Tallahassee, FL 32306, e-mail: will.moore@fsu.edu
*
e-mail: jee03c@fsu.edu (corresponding author)

Abstract

Private information characteristics like resolve and audience costs are powerful influences over strategic international behavior, especially crisis bargaining. As a consequence, states face asymmetric information when interacting with one another and will presumably try to learn about each others' private characteristics by observing each others' behavior. A satisfying statistical treatment would account for the existence of asymmetric information and model the learning process. This study develops a formal and statistical framework for incomplete information games that we term the Bayesian Quantal Response Equilibrium Model (BQRE model). Our BQRE model offers three advantages over existing work: it directly incorporates asymmetric information into the statistical model's structure, estimates the influence of private information characteristics on behavior, and mimics the temporal learning process that we believe takes place in international politics.

Type
Research Article
Copyright
Copyright © The Author 2008. Published by Oxford University Press on behalf of the Society for Political Methodology 

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Footnotes

Author's note: For their assistance with the Phoenix cluster at Florida State University (FSU) we wish to thank Jim Wilgenbusch and Jeff MacDonald of the Computational and Information Science Technology Department. The Department of Political Science at FSU graciously provided us with access to Quantify, its shared parallel computing resource. We also wish to thank Ken Schultz, David Siegel, Curt Signorino, Jeff Staton, our anonymous reviewers, and the participants and attendees of our 2007 APSA conference panel and 2007 Political Methodology conference poster session for their helpful comments and suggestions.

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