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Equilibrium Behavior in Crisis Bargaining Games

Banks, Jeffrey S. (1990) Equilibrium Behavior in Crisis Bargaining Games. American Journal of Political Science, 34 (3). pp. 599-614. ISSN 0092-5853. https://resolver.caltech.edu/CaltechAUTHORS:20160524-152122595

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Abstract

This paper analyzes a general model of two-player bargaining in the shadow of war, where one player possesses private information concerning the expected benefits of war. I derive conclusions about equilibrium behavior by examining incentive compatibility constraints, where these constraints hold regardless of the game form; hence, the qualitative results are "game-free." I show that the higher the informed player's payoff from war, the higher is his or her equilibrium payoff from settling the dispute short of war, and the higher is the equilibrium probability of war. The latter result rationalizes the monotonicity assumption prevalent in numerous expected utility models of war. I then provide a general result concerning the equilibrium relationship between settlement payoffs and the probability of war.


Item Type:Article
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.2307/2111390DOIArticle
http://www.jstor.org/stable/2111390 JSTORArticle
Additional Information:© 1990 Midwest Political Science Association. Manuscript submitted 31 August 1989. Final manuscript received 18 December 1989. I would like to thank Bruce Bueno de Mesquita and two anonymous referees for valuable comments and suggestions. Financial support from the National Science Foundation and the Sloan Foundation is gratefully acknowledged.
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Funding AgencyGrant Number
Alfred P. Sloan FoundationUNSPECIFIED
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Issue or Number:3
Record Number:CaltechAUTHORS:20160524-152122595
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20160524-152122595
Official Citation:Banks, Jeffrey S. "Equilibrium Behavior in Crisis Bargaining Games." American Journal of Political Science 34.3 (1990): 599-614.
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:67316
Collection:CaltechAUTHORS
Deposited By: Ruth Sustaita
Deposited On:24 May 2016 22:28
Last Modified:03 Oct 2019 10:04

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