Revealing Preferences: Empirical Estimation of a Crisis Bargaining Game with Incomplete Information

We develop an empirical estimator directly from an extensive-formcrisis bargaining game with incomplete information and discussits features and limitations. The estimator makes it possibleto draw inferences about states' payoffs from observationaldata on crisis outcomes while remaining faithful to the theorizedstrategic and informational structure. We compare this estimatorto one based on a symmetric information version of the samegame, using the quantal response equilibrium proposed in thiscontext by Signorino (1999, American Political Science Review93:279–298). We then address issues of identificationthat arise in trying to learn about actors' utilities by observingtheir play of a strategic game. In general, a number of identifyingrestrictions are needed in order to pin down the distributionof payoffs and the effects of covariates on those payoffs.