
1 
Paper

Statistical Analysis of Finite Choice Models in Extensive Form
Signorino, Curtis S.

Uploaded 
07091999

Keywords 
random utility discrete choice strategic equilibrium finite choice game theory

Abstract 
Social scientists are often confronted with theories where one or
more actors make choices over finite sets of options leading to a
finite set of outcomes. Such theories have addressed everything from
whether states go to war, to how citizens or senators vote, to the
form of transportation taken by commuters. Over the last thirty
years, the most common way to analyze finite (or discrete) choice
data has been to use nonstrategic random utility models, even when
the theory posited as generating the data is explicitly strategic.
Moreover, the source of uncertainty  what makes the utility random
 is often paid little attention.
In this paper, I generalize an entire class of statistical finite
choice models, with both wellknown and new nonstrategic and
strategic special cases. I demonstrate how to derive statistical
models from theoretical finite choice models and, in doing so, I
address the statistical implications of three sources of uncertainty:
agent error, private information about payoffs, and unobserved
variation in regressors. I provide conditions for the types of choice
structures that result in observationally equivalent statistical
models. For strategic choice models, the type of uncertainty matters,
resulting in observationally nonequivalent statistical models.
Moreover, misspecifying the type of uncertainty in strategic models
leads to biased and inconsistent estimates.
Version: June 22, 1999 

2 
Paper

Is Instrumental Rationality a Universal Phenomenon?
Bennett, D. Scott
Stamm, Allan C.

Uploaded 
04221998

Keywords 
rational expected utility preferences game theory

Abstract 
This paper examines whether the expected utility theory of war
explains international conflict equally well across all regions
and timeperiods as a way of examining whether instrumental
rationality is a universal phenomenon. In the rational choice
literature, scholars typically assume that decisionmakers are
purposive egoistic decisionmakers with common preferences
across various outcomes. However, critics of the assumption
have suggested that preferences and decision structures vary as
a function of polity type, culture and learning among state
leaders. There have been few attempts to directly examine this
assumption and evaluate whether it seems empirically justified.
In this paper we attempt to test the assumption of common
instrumental rationality, examining several competing hypotheses
about the nature of decision making in international relations
and expectations about where and when instrumental rationality
should be most readily observable. In particular, we want to
explore the effects of regional learning to discover if there is
a difference by region and over time in the outbreak of war and
the predictions of the expected utility model. We find
important differences both over regions and over time in how the
predictions of expected utility theory fit actual conflict
occurrence. 

3 
Paper

Is Instrumental Rationality a Universal Phenomenon?
Bennett, D. Scott
Stam, III, Allan C.

Uploaded 
04221998

Keywords 
rational expected utility preferences game theory

Abstract 
This paper examines whether the expected utility theory of war
explains international conflict equally well across all regions
and timeperiods as a way of examining whether instrumental
rationality is a universal phenomenon. In the rational choice
literature, scholars typically assume that decisionmakers are
purposive egoistic decisionmakers with common preferences
across various outcomes. However, critics of the assumption
have suggested that preferences and decision structures vary as
a function of polity type, culture and learning among state
leaders. There have been few attempts to directly examine this
assumption and evaluate whether it seems empirically justified.
In this paper we attempt to test the assumption of common
instrumental rationality, examining several competing hypotheses
about the nature of decision making in international relations
and expectations about where and when instrumental rationality
should be most readily observable. In particular, we want to
explore the effects of regional learning to discover if there is
a difference by region and over time in the outbreak of war and
the predictions of the expected utility model. We find
important differences both over regions and over time in how the
predictions of expected utility theory fit actual conflict
occurrence. 

4 
Paper

Negotiating Coalitions
Bottom, William P.
Miller, Gary J.
Holloway, James
McClurg, Scott D.

Uploaded 
09151998

Keywords 
Game theory Experimental Design Coalition Formation Negotiation Risk

Abstract 
Game theory's best efforts have done little but verify the undecidability of
coalitional problems. The typical solution concept specifies the hypothesized
distribution for each of several viable coalition structuresbut cannot choose
among the coalition structures. For example, the bargaining set presumes that
bargaining proceeds by objection and counterobjection until potential
coalition members are indifferent between the coalitions that they pivot
between. Thus, the bargaining set makes a clear distributional hypothesis,
but thereby gives up any leverage on which coalition will occur. In this
paper, we explore how risk preferences and the nature of coalitional goods
influence the coalitionbuilding process. We test a variety of potential
explanations with data collected in an experimental setting. Foremost among
our conclusions is that the coalitions which form among inexperienced subjects
are affected by their risk preferences. We further find that this effect
disappears among experienced subjects. We conclude the paper by discussing
some of the explanations for and questions stemming from our results. 

5 
Paper

Costly Information and the Stability of Equilibria in the Intergenerational Dilemma
Signorino, Curtis S.

Uploaded 
07161996

Keywords 
evolutionary game theory overlapping generations model

Abstract 
Past analyses of the intergenerational dilemma have identified a number
of subgameperfect equilibrium strategies. However, nothing has been
said about the stability of these equilibria: how robust they are to
perturbation or how difficult it is to move to a Paretoimproving
equilibrium. Moreover, it is generally assumed that information is
costless. In this paper, I incorporate costly information and analyze
the stability of the equilibria, identifying (1) the conditions under
which CONFORMIST versus DEFECTOR equilibria will be stable and (2) the
degree of difficulty in moving from the Paretosuboptimal DEFECTOR
equilibrium to the Paretooptimal CONFORMIST equilibrium. In general,
the maintenance of a CONFORMIST equilibrium becomes more difficult the
more the second period is discounted and the higher the information
costs. Additionally, when altruists are included in the model and
information is only slightly costly, cycling among the homogeneous
equilibria can occur. I show that to counter this instability,
conformists should always punish altruists  that to protect one's
own future payoffs, one may need to police the interactions of others. 

6 
Paper

The Selection Effect of International Dispute Settlement Institutions
Reinhardt, Eric

Uploaded 
11111996

Keywords 
compliance enforcement dispute settlement institution bargaining game theory

Abstract 
This paper examines the impact of dispute settlement institutions on the
outcome of international conflicts. Realists contend that such
institutions are epiphenomenal to underlying power relationships.
Neoliberals argue in contrast that institutions make cooperation more
likely by clarifying obligations and reducing transaction costs. The
paper introduces some puzzling evidence about the role of the dispute
process under the General Agreement on Tariffs and Trade (GATT). The
evidence highlights a selection effect, in which cooperation is more
likely at earlier stages of institutional escalation than after the
adjudication is complete. Yet why would defendants plea bargain if they
know they can spurn contrary rulings? To address this question, the
paper introduces an incomplete information model of international
bargaining and escalation within the context of a dispute settlement
institution. The model generates a number of surprising and powerful
results. First, even defendants who do not fear unfavorable rulings will
be more likely to plea bargain in equilibrium because of the dispute
settlement institution. Second, those disputes that reach the highest
levels of escalationin which rulings are issuedare much less
likely to end cooperatively than those that end before the ruling stage.
The model thus explains the puzzling GATT selection effect. It also
suggests that dispute settlement institutions can have a positive effect
on cooperation (contra realist theory), but not through the mechanisms
posited by neoliberals. In order to see the influence of such
institutions, we must examine not those cases in which they issue
injunctions, but rather those in which their involvement is peripheral
or merely threatened. 

8 
Paper

Methodology as ideology: mathematical modeling of trench warfare
Gelman, Andrew

Uploaded 
01262005

Keywords 
cooperation First World War game theory prisonerâ??Ã?Ã´s dilemma

Abstract 
The Evolution of Cooperation, by Axelrod (1984), is a highly influential study that identifies the benefits of cooperative strategies in the iterated prisoner’s dilemma. We argue that the most extensive historical analysis in the book, a study of cooperative behavior in First World War trenches, is in error. Contrary to Axelrod’s claims, there soldiers in the Western Front were not generally in a prisoner’s dilemma (iterated or otherwise), and their cooperative behavior can be explained much more parsimoniously as immediately reducing their risks. We discuss the political implications of this misapplication of game theory. 

10 
Paper

Monotone Comparative Statics in Models of Politics: A Method for Simplifying Analysis and Enhancing Empirical Content
Bueno de Mesquita, Ethan
Ashworth, Scott

Uploaded 
08182004

Keywords 
game theory formal theory empirical implications of theoretical models comparative statics

Abstract 
We elucidate a powerful yet simple method for deriving comparative statics conclusions for a wide variety of models: Monotone Comparative Statics (Milgrom and Shannon, 1994). Monotone comparative static methods allow researchers to extract robust, substantive empirical implications from formal models that can be tested using ordinal data and simple nonparametric tests. They also replace a diverse range of more technically di±cult mathematics (facilitating richer, more realistic models), a large set of assumptions that are hard to understand or justify substantively (highlighting the political intuitions underlying a model's results), and a complicated set of methods for extracting implications from models. We present an accessible introduction to the central monotone comparative statics results and a series of practical tools for using these techniques in applied models (with reference to original sources, when relevant). Throughout we demonstrate the techniques with examples drawn from political science. 

