This award was funded through the Social and Behavioral Dimensions of National Security, Conflict, and Cooperation competition, a joint venture between NSF and the Department of Defense.
The application of bargaining models to the study of interstate conflict has produced a large number of insights regarding why states fight, but it leaves unsolved the puzzle as to why rational leaders would choose conflict if fighting incurs costs they could avoid in a negotiated settlement. Most bargaining models of conflict assume leaders are perfectly sensitive to expected costs and benefits, and as a result, they do not make decision errors. This project explores a bargaining model in which players are not assumed to be perfect decision makers, nor to believe their opponents are perfect decision makers. Instead, leaders are assumed to be somewhat insensitive to expected costs and benefits and have beliefs about regarding the insensitivity of their opponents. As a result, players may make mistakes in the way they play and may exhibit suboptimal behavior relative to the predictions of standard game theory. A set of laboratory experiments will be undertaken to evaluate the extent to which such a model can explain the types of decision errors and suboptimal outcomes that occur experimentally. Experiments will also examine the consequences of having players trained in leadership and how large expected payoffs (high stakes) influence decision making.
