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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. doi:10.2307/2111390.

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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.

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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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Alfred P. Sloan FoundationUNSPECIFIED
Issue or Number:3
Record Number:CaltechAUTHORS:20160524-152122595
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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
Deposited By: Ruth Sustaita
Deposited On:24 May 2016 22:28
Last Modified:11 Nov 2021 00:30

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