International Relations Theory
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1 Cambridge University Press International Relations Theory Written for advanced undergraduate and graduate students, this is the first textbook on international relations theory to take a specifically game-theoretic approach to the subject, and provide the material needed for students to understand the subject thoroughly, from its basic foundations to more complex models. International relations theory is presented and analysed using simple games, which allow students to grasp the concepts and mechanisms involved with the rationalist approach without the distraction of complicated mathematics. Chapter exercises reinforce key concepts and guide students to extend the models discussed. Drawing examples from international security, international political economy, and environmental negotiations, this introductory textbook examines a broad array of topics in international relations courses, including state preferences, normal form games, bargaining, uncertainty and communication, multilateral cooperation, and the impact of domestic politics. is Professor in the Department of Political Science at the University of Wisconsin where he teaches courses on international relations theory, game theory and international relations, nuclear weapons and world politics, terrorism and conflict resolution. He has published articles in the American Political Science Review, International Organization, World Politics, and International Security, and his first book, Trust and Mistrust in International Relations, won the 2006 Conflict Processes Best Book Award.
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3 Cambridge University Press International Relations Theory The Game-Theoretic Approach
4 University Printing House, Cambridge CB2 8BS, United Kingdom Cambridge University Press is part of the University of Cambridge. It furthers the University s mission by disseminating knowledge in the pursuit of education, learning and research at the highest international levels of excellence. Information on this title: /kydd c 2015 This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published 2015 Printed in the United Kingdom by TJ International Ltd. Padstow Cornwall A catalog record for this publication is available from the British Library Library of Congress Cataloging in Publication data Kydd, Andrew H., 1963 International relations theory : the game theoretic approach /. pages cm ISBN (Hardback) ISBN (Paperback) 1. International relations. 2. Game theory. I. Title. JZ1305.K dc ISBN Hardback ISBN Paperback Additional resources for this publication at /kydd Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.
5 To Yoi, Amelia, and Tommy
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7 Contents List of figures page x List of tables xii Acknowledgements xiv 1 Introduction International relations theory Game theory and international relations theory Paradigm wars and problem oriented research The utility of a partial view Conclusion 10 2 What states want Utility theory Issue spaces The shape of utility functions The state as unitary actor The national interest Conclusion 34 Exercises 34 3 Varieties of strategic settings Normal form games and Nash equilibria The Prisoner s Dilemma The Assurance game Coordination Chicken Matching Pennies Conclusion 53 Exercises 53
8 viii contents 4 Bargaining Extensive form games A Bargaining game Adding a status quo Bargaining and conflict War as a binary lottery War and intermediate outcomes Conclusion 73 Exercises 73 5 Power change and war The problem of preventive war Power change with bargaining in the future Power change with bargaining in the present and future Bargaining over power Conclusion 90 Exercises 90 6 Private information and war Modeling uncertainty Bargaining with uncertainty over the cost of conflict Game forms and game free results The problem of mistrust Uncertainty over the balance of power Conclusion 110 Exercises Arms competition and war Costly deterrence The risk return tradeoff and deterrence Conclusion 125 Exercises Cooperation theory The problem of cooperation Discounting future payoffs Finitely repeated games Indefinitely repeated games Tit for Tat and Contrite Tit for Tat 136
9 ix contents 8.6 Monitoring A Tariff Barrier game The folk theorem and multiple equilibria Empirical investigations Conclusion 147 Exercises Diplomacy and signaling Communication in international relations Updating beliefs and Bayes Rule Cheap talk and diplomacy Costly signals and crisis bargaining Conclusion 175 Exercises Multilateral cooperation Public goods The Tipping game Conclusion 192 Exercises Domestic politics and international relations The impact of domestic politics Domestic constraints in bargaining Two-sided constraints Cheap talk and negotiation with domestic constraints Conclusion 210 Exercises 210 References 211 Index 227
10 Figures 2.1 Utility functions page The Edgeworth Box Risk attitudes Prospect theory utility function Statusquoandgreedystates Two status quo states A case of ethnic conflict Equilibria in the Competition for Power with Costs game The Deterrence game The issue space The Bargaining game Bargaining with a status quo Bargaining with a status quo and conflict option The bargaining range The bargaining outcome The bargaining range with war as a lottery Utility functions that devalue intermediate outcomes War with an indivisible good The Power Change game without bargaining Power change equilibria without bargaining The Power Change game with bargaining in the future Power change equilibria with future bargaining Power change equilibria with present and future bargaining Bargaining with private information over costs The bargaining range with incomplete information Equilibria in the Bargaining game with incomplete information Arms race equilibria: complete information Arms War game with uncertainty: risk return equilibrium The Tariff game issue space Bayes Rule with continuous probability 152
11 xi list of figures 9.2 Types in the Treaty game Cost cutoff points with scientific uncertainty The Costly Signaling game Costly Signaling game: complete information equilibria Costly Signaling game: strategies for each state/type Bluffing equilibrium in the Costly Signaling game Comparative statics in the bluffing equilibrium The N person Prisoner s Dilemma Military spending among allies The Tipping game Landmines Convention game Multilateral arms control with interior equilibria A two-dimensional bargaining space of tariff levels Bargaining with ratification Equilibrium in the Two-Level Bargaining game Bargaining with two-sided ratification Equilibrium with two-sided constraints Issue space with uncertainty about state 2 s legislature Communication and bargaining with domestic constraints 208
12 Tables 2.1 Different state utility functions page The Prisoner s Dilemma The Prisoner s Dilemma: general notation The exchange game The Assurance game The Pre-emptive War game The Coordination game The Standard Setting game Chicken The Nuclear Crisis game Matching Pennies The D-Day game The Pre-emptive War game A Nuclear Crisis game SPNE in the Bargaining game SPNE in the Bargaining game with a status quo SPNE in the Bargaining game with conflict Equilibria in the Power Change game without bargaining Equilibria in the Power Change game with bargaining in the future Power Change game with present and future bargaining: no revision equilibrium Power Change game with present and future bargaining: revision in the future equilibrium Power Change game with bargaining in the present and future: double revision equilibrium Power Change game with bargaining in the present and future: preventive war equilibrium No war, no revision equilibrium Equilibria when both types have a credible threat to fight Equilibria when only low cost type has credible threat to fight 98
13 xiii list of tables 6.4 The Preventive War game with mistrust Four types of state The Mutual Optimism game, version The Mutual Optimism game, version The Trust game Payoffs in the Arms War game The Arms War game: no build equilibrium The Arms War game: no build equilibrium The Arms War game: deterrence equilibrium The Arms War game: war equilibrium The Arms War game with uncertainty: risk return equilibrium The Prisoner s Dilemma A Coordination game A Modified Prisoner s Dilemma A one-round deviation from Tit for Tat A one-round deviation from Contrite Tit for Tat The Prisoner s Dilemma The Treaty game The truthful communication equilibrium with scientific certainty The truthful communication equilibrium with scientific uncertainty The truthful communication equilibrium with uncertainty over sender s motivations Different types of goods Equilibria in the Bargaining game with domestic constraints Equilibria in the Bargaining game with two-sided constraints Equilibria in the Constrained Bargaining game with uncertainty 208
14 Acknowledgements Authors of textbooks owe their greatest debts to their teachers and their students. I had my first brush with international relations theory in Kenneth Oye s Introduction to World Politics class at Princeton in the mid 1980s. The class was held in the biggest classroom on campus and there were over 400 students. His lectures were so good we applauded after every one, not just the one at the end of the semester. After a few years I went to the University of Chicago where I learned international relations theory and game theory from James Fearon, Charles Glaser, Charles Lipson, John Mearsheimer, Duncan Snidal, Daniel Verdier, Stephen Walt, and In-Koo Cho. Retracing my steps, I presented the first three chapters at the PIPES workshop at the University of Chicago in May I thank the participants there for their many helpful comments. It is always a treat to come home. I first started teaching a course such as the one this book is based on at the University of California at Riverside. However, I only started working on the textbook a few years ago at the University of Wisconsin. I would especially like to thank the graduate students in my classes who read draft chapters in the early stages. In the first year they were: Roseanne McManus, Mark Toukan, Steven Wilson, Mason DeLang, Jason Ardanowsky, and Mert Kartal. The second generation were: Budak Bugrahan, Patrick Kearney, Richard Loeza, Susanne Mueller, Ryan Powers, and Anna Weisfeiler. The next year I taught it through the itv consortium to students at Ohio State and Illinois; the roster was Caitlin Clary, Gina Martinez, William Massengill, William McCracken, Yoshiki Nakajima, Marzia Oceno, Jason Duu Renn, Ashlea Rundlett, Daniel Silverman, Daniel Wollrich, Joshua Wu, Iku Yoshimoto, and Nikolaj Zemesarajs. The last year s cohort was Anne Anderson, Sarah Bouchat, Clarence Moore, and Nathaniel Olin. I would also like to thank a number of anonymous referees at Cambridge for their comments on the proposal and early drafts of some chapters, and John Haslam for taking a flier on the project.
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