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Nonuniqueness of the Equilibrium in Lewis and Schultz's Model

  • Jinhee Jo (a1)
Abstract

Lewis and Schultz (2003) develop a statistical signaling model to deal with international conflicts or bargaining situations in which states have private information about their payoffs. They claim that they can confirm that there always exists a unique equilibrium in their model. In this paper, I show that Lewis and Schultz's claim is not true and their model admits multiple equilibria under some parameter settings. Monte Carlo analysis shows that when there are multiple equilibria, the parameter estimates may not converge to their true values even if the number of observations increases.

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James D. Fearon 1995. Rationalist explanations for war. International Organization 49: 379414.

James D. Fearon 1995. Rationalist explanations for war. International Organization 49: 379414.

Jeffrey B. Lewis , and Kenneth A. Schultz 2003. Revealing preferences: Empirical estimation of a crisis bargaining game with incomplete information. Political Analysis 11: 345–67.

Jeffrey B. Lewis , and Kenneth A. Schultz 2003. Revealing preferences: Empirical estimation of a crisis bargaining game with incomplete information. Political Analysis 11: 345–67.

Robert Powell . 2004. Bargaining and learning while fighting. American Journal of Political Science 48: 344–61.

Robert Powell . 2004. Bargaining and learning while fighting. American Journal of Political Science 48: 344–61.

Curtis S. Signorino 1999. Strategic interaction and the statistical analysis of international conflict. American Political Science Review 93: 279–98.

Curtis S. Signorino 1999. Strategic interaction and the statistical analysis of international conflict. American Political Science Review 93: 279–98.

Curtis S. Signorino 2003. Structure and uncertainty in discrete choice models. Political Analysis 11: 316–44.

Curtis S. Signorino 2003. Structure and uncertainty in discrete choice models. Political Analysis 11: 316–44.

Alastair Smith . 1999. Testing theories of strategic choice: The example of crisis escalation. American Journal of Political Science 43: 1254–83.

Alastair Smith . 1999. Testing theories of strategic choice: The example of crisis escalation. American Journal of Political Science 43: 1254–83.

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Political Analysis
  • ISSN: 1047-1987
  • EISSN: 1476-4989
  • URL: /core/journals/political-analysis
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