Midwest Political Science Association

Testing Theories of Strategic Choice: The Example of Crisis Escalation Author(s): Alastair Smith Source: American Journal of Political
Science, Vol. 43, No. 4 (Oct., 1999), pp. 1254-1283 Published by: Midwest Political Science Association Stable URL: http://www.jstor.org/stable/2991827 . Accessed: 28/01/2014 17:59
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Choice: Theories ofStrategic Testing ofCrisisEscalation TheExample

AlastairSmith,Yale University ofinternational crisis escalation that, becauseactors imply Strategic-choice explanations rethelikely of others and choose actionsthat avoid undesirable responses anticipate andcenofnations' to use force areinterdependent decisions sponses, ourobservations neighbor (A). bya powerful Forexample, suppose a weaknation (B) is threatened sored. backdown.Unfortunately, this censors ourability If B believes A's threat, then itshould A wouldactually use violence. methods ignore this Manytraditional toobserve whether influence crisisbehavior. To and mis-specify theextent to whichvariables censoring I developtheStrategically and censoring, ameliorate theproblems of interdependence Choicemodel.Estimating thismodelusingBayesianMarkovchain Censored Discrete I analyzeBueno de Mesquitaand Lalman's (1992) methods, MonteCarlo simulation data(Gochmann andMaoz version oftheMilitarized Interstate Dispute dyadically-coded strategic explanastatistics, I conclude that comparison 1984).Based on Bayesian-model tions onesin explaining crisis behavior. nonstrategic outperform 1. INTRODUCTION
strategic choice assume thatpoliticalactorsanticiTheoriesinvolving their own choices.Thus,acactorswhenmaking patethedecisionsof other modelsalso suggestsetors'decisionsare interdependent. Strategic-choice lection effects(Achen 1986; Fearon 1993, Gartnerand Siverson 1996; an unMorrow1989; Signorino1999; Smith1996). Whenactorsanticipate to avoid thecontingent cirthey attempt by another actor, favorable response whichtheresponse will occur.Thus,their choice depends cumstances under as itdoes uponobserved events. Staneventualities as muchuponunrealized as do notadequatelydeal withthiscensoring; dardeconometric techniques if we believe thatpoliticalactors such,thesemethodsfail. Consequently,
ofthePeace ScienceSociat theannualmeeting Earlier versions ofthis paperhavebeenpresented Political ScienceAssociameeting oftheMidwest ety(International) in Houston (1996), theannual inWashington Political D.C. (1997) andin ScienceAssociation meetings tion(1997),the American of California camof politicalscienceat theUniversity BostonMA (1998), and thedepartments andDavis andatDuke University; I thank theparticipants for their comments. pusesofLos Angeles deserve thanks I havereceived much this project. In particular, Sid ChibandEd Greenberg helpwith in several algorithms that wereuseful Sid Chibprovided for directing methrough theeconometrics. coding writing theprograms. BruceBuenode Mesquitamadehis dataavailableand helpedclarify of Lee Epstein,Fiona McGillivray, Curtis decisions.I benefitted from thehelpfulcomments I am also thankful to John Martin and several referees. GinkelandAndrew Signorino, anonymous I gratefully thefinancial oftheNational support Science for their research assistance. acknowledge No. SBR-9631990. Foundation, grant 1999,Pp. 1254-1283 ?1999 bythe Science,Vol.43, No. 4, October American Journal ofPolitical Midwest Political ScienceAssociation
TESTING THEORIES OF STRATEGIC CHOICE
1255
makechoicesstrategically, then thesemethods giveincorrect inferences about thefactors that influence political decisions. HereI explain therelationship between strategic explanations andemI start pirical estimation. byoutlining the basicprinciples ofstrategic choice within ofinternational on theinterdependent thecontext disputes, focusing nature ofdecision making andthe roleofcounterfactual analysis. Then I developmymain theme, the relationship between theoretical explanations and tests. empirical I consider a substantive To illustrate this relationship, problem: why do I develop nations escalate crises? a simple international strategic explanation I appraise andwithin this theappropriateness of ofcrisis behavior, context, for standard econometric crisis behavior. To achieve procedures estimating behaveaccording to mysimple thisaim,I suppose that nations strategicIfthis is the rechoice ofdatageneration explanation. process (hownations estithen would conventional estimation allybehave), techniques correctly Theanswer is no.Ifwe start with model mate the model? a known involving obtained from anduse itto generate theestimates strategic behavior data, do not match the known model. conventional statistical techniques ofconvenInterdependence andcensoring account for thedeficiencies. I develop as a guide, the theoretical tional approaches. Using my explanation Thismodel Censored Discrete Choicemodel. incorStrategically explicitly decisions durtheinterdependent andcensored nature ofescalatory porates I estimate ingcrises. this model using a Bayesian Markov chain Monte Carlo Thissimulation method a powerful (MCMC) simulation technique. provides alternative tousing maximum likelihood estimation. these estimates to Using calculate model I conclude that choiceexplanatesting statistics, strategic I alsofind fewoftheexones.However, that tions out-perform nonstrategic in international relations influence often cited planatory variables strongly examined crisis behavior andSinger (see Gibbs 1993).Having substantively I conclude a general discussion reaffect crisis with what factors escalation, andempirical lating strategic choice explanations testing.
2. STRATEGIC CHOICE
actors the Modelsof strategic choiceassumethat political anticipate ofothers whenmaking choices. Twoimplicabehavior likely subsequent When tionsflowfrom thisassumption: and censoring. interdependence which eachactor considers the of actions totake, evaluating likely response ofstatistical we cannot conother actors. Forthepurposes political testing, choices inisolation. Eachtime an actor makes onechoice sider oneactor's wouldhavehaprather than sheprevents us from what another, observing the unrealized alternative. hadshechosen pened
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Smith Alastair
study ofcounterfactuals. Itaskswhy poStrategic choice is theexplicit ofplayoveranother. In gametheolitical actors chooseoneparticular path all we empirically is theequilibrium path: thechoices retic terms, observe why actors stay ona paractors actually make. Yet, the key tounderstanding is theanticipated ofdeviating to a different ticular path. path consequences Thatthese unobserved, precisely becauseactors seek consequences remain A theory makes them nolesspertinent. describes the relationtoavoidthem, Ythebehavior we want toexplain-the dependent variable ship between factors that this behavior-the independent variables X.To andthe influence test theempirical ofa theoretical explanation, statistical procedures validity X influences Y andmeasure overall extent towhich the of estimate the ability To assess theexplanatory to predict variation. therelationship behavior an appropriate thedistributional reofa theory, method must assume power X andY that techbetween the theory predicts. Standard statistical lationship X andY.Yet,strategic a linear between assume relationship niques typically a different In suchcircumoften relationship. explanations hypothesize fail the true ofX on Y and, standard to estimate impact stances, techniques ofthe theory. hence, misrepresent theexplanatory power crises I ofinternational as a substantive example, Usingtheescalation econometric basedon thelinear techniques showhowandwhystandard incentives ina simple model fail. Evenifindependent variables affect linear within choice andcensoring inherent theinterdependence strategic manner, X andY is nonlinear the between mean that observed (Buenode relationship hereI focuson internaandZorick, Mesquita, Morrow, 1997).Although ofstrategic choicewithin thepervasiveness tional politics generrelations, inall fields ofpolitical science. Ofcourse these concerns relevant allymake exto address these issues.Pertinent mymodelis notan isolated attempt and Hamilton Gates(1997), Brehm (1996), amplesincludeBrehm-and and Roberts Munger, (1994). Yet,of Feinstein (1989, 1990),and Grier, relevance within thesubstantive of international domain crises, greatest to examine response equilibrium Signorino (1999) uses thelogitquantal He incorporates models ofcrises. these equilibrium specific game-theoretic which a simiinto an estimation procedure, takes form predictions empirical to a specific lartonested The estimator, gamestruclogit. byitsreference from controls for that results off thepath counterture, explicitly censoring his alternative factuals. model offers an solution to control for the Thus, behavior. ofcensoring introduced impact bystrategic
3. ESCALATION OF INTERNATIONAL CRISES
I start international escalate disputes? usinga simple Whydo nations modelofcrisis in which nation the deescalation A, nominally aggressor, a threat, then nation B cideswhether ornot tothreaten B. IfA makes nation
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then must decide whether toacquiesce toA's demands orresist. IfB resists, A decides itsthreat its whether ornottoimplement anduse force to attain ona goal.1 To study A's escalatory decisions, wemight codeA'suseofforce 0 represents 1 represents and2 three-point scale,where no threat, threats, represents theactual useofforce. that To simplify, suppose weknow the realmodel. Inparticular, assume these because powerful nations expect todo wellshould anyconflict occur, aremore to use force than weaknations. nations Thus, the powerful likely influences their relative power ofA andB strongly propensity touseforce. thepredictions ofinternational To illustrate ofa strategic-choice theory A is I offer three that nation behavior, stylized examples. Initially, suppose A fears little theuse of Givenitsstrength, nation from extremely strong. nation B to achieve itsgoals.Given A's strength, B force andso threatens A is not ifB doesnot that andwilluseforce Since knows bluffing acquiesce. Thus,when it is muchweaker, nation B anticipates losinganyconflict. A is strong, when thelikely outB surrenders. threatened, Consequently, comeis a threat byA andacquiescence byB. A is very where weakcompared toB. consider theother Next, extreme, A is unlikely touseforce andevenifitdoes,B anticipates SinceB is strong, ifA threatens, rather than backdown. nation B willresist winning. Hence, A makes B willresist, no initial threats. Threats raise simply Knowing that A's costswithout whenA is offering anychanceof success.Therefore, theoutcome is thestatus weak, quo. when A andB areofsimilar Thesituation is more strength. ambiguous A may A might theevenmatch, make threats andmaybe B willresist. Given In this we might ormaynotrisk actual conflict. to see the scenario, expect ofpotential outcomes. whole range 3.1 FailureofTraditional Methods
Interdependence
the more B is toacquiThegreater A'spropensity touseviolence, likely Thetheory that both esce.A andB's decisions arenot independent. suggests we should include A andB's decision relative depends upon strength. Thus, A andB's decivariable both relative poweras an independent affecting find measures for since we cannever sions. every posUnfortunately perfect variables is insufficient to acsiblevariable, simply including independent A andB. Any measurement errors count for all the between interdependence A andB's in theindependent influence oranyomitted variables, variables,
modelsof crisisescalation consider similar structures (Bueno de Mesquitaand 1Numerous Lalman 1986, 1992; Fearon1994a, 1994b;Morrow1989; 0 Neil 1994; Powell 1990; and Smith 1995tomention buta few).
1258
Alastair Smith
ina systematic manner. inthe decisions Suppose, context ofthe illustrations A is actually above, nation stronger than ourproxies for military capability A is more than suggest. On average, likely touse force ourmeasures suggest. In terms ofa least-squares ofA's decision we canthink analysis alone, ofthis error as a positive random (residual). Unfortunately, ourinaccuracy in B less measuring A's military also influences B's choice, capability making ifwe consider B's decision in least aggressive. Consequently, analyzing squares terms, we cannot assume that valueoftheerror theexpected term is zero.Rather, inthis itis negative. in(theresidual) illustration, Strategic correlated error terms. terdependence implies
Censoring
ofdecision ourability toobserve Thesequential nature censors making A andB's behavior. ifB acquiesces inresponse Forexample, toA's threat, A wasbluffing. then we never find outwhether thetheory that Yet, suggests it is precisely becauseA willuse force that B acquiesces.Similarly, the A is less likely that when B resists, in the theory suggests to makethreats all we observe is no threat first place.Yet,empirically byA. We do notobserve whether B resists, butourexplanation that onereason A for suggests is that nottothreaten B willresist. affect estimation Does censoring the empirical (Smith [1996]analyses alliances andprovides tests that reliability ofinternational demonstrates that this To answer consider theeffect censoring matters)? question, estimating use Sincetheobjective is to deterofstrength onA's decision to violence. minewhether leadsto incorrect we needto compare censoring inference, a known as a thought methods statistical against process. Suppose, experithe above.In that we use datagenerated theoretical model ment, by simple ofnations was a strong ofthepropensity model relative determinant power ifdatawere touse violence. As Table1 summarizes, generated bythis proA is weak we when status andwhen cess,then anticipate mostly quo events A is strong we expect that B acquiesces toA's threats. Thetheory suggests A andB areevenly ofeachoutcome that we should a variety when anticipate Ifourstatistical matched. method is appropriate, then ourestimate ofhow A's strength the impacts itsuseofviolence should known reflect relationship this inthis usedtogenerate data. hypothetical Unfortunately, thought experilinear model ment, thetraditional underestimates theimpact ofstrength on A's useofforce. Thehypothetical a weakreladatainTable1 suggests only X andYA. tion between Yet,theunderlying asserted data-generation process a strong between force Thecensoring relationship andstrength. created by biasesestimates theimpact ofstrength on theuse offorce. strategic-choice suchestimates toexplain theability ofstrength the Obviously, misrepresent useofviolence.
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Table 1. Nation A's Strength and Its Observed UsedofForce

A's Strength, X strong, 1 medium, 0.5 0 weak, Typical Outcomes acquiescence various Status Quo A's Level ofForce,YA medium, 1 low, medium orhigh, 0, 1,or2 low, 0
Standard econometric are often techniques inappropriate forestimating modelsinvolving choice.Yetwe neednotthrow strategic outall ourexisting statistical tools.Rather, we need to adaptthesemethods so that they capture thedistributional of strategic-choice I implications theories. In particular, advocateusingmultivariate theinterdependence analysisto capture between variablesand truncation methods (Bloom and Killingworth 1985; Heckman 1976, 1979; Tobin 1958) to accountforcensoring. 4. A STATISTICAL MODEL OF CRISIS ESCALATION In thissection, I developa statistical modelof crisisescalationand use itto analyzeBueno de Mesquitaand Lalman's (1992) dyadically-coded version of the MilitarizedInterstate Dispute Dataset (Gochmannand Maoz 1984).2These data code thelevel of violencethateach party in thedispute used on an ordinal five-point scale. Thus,YA represents thelevel of violence A uses againstnation nation B, and YB is thelevel of violenceB uses against A. The data are coded on a five-point scale, withhigher values representing moreviolentacts. Level zero represents no use or threat to use force.Level a threat one represents to use military force.A typicallevel-twoeventis mobilization. In general, level-two events aremorethantalkbutless military thanfighting. Limiteduse of forceconstitutes a level-three event.Events thatmeettheCorrelates of Warprojectdefinition of war (1000 battlefatalias level-four ties) are classified violence.
Probit 4.1 Ordered Model

Rather thandevelopa modelfrom I borrow as muchas possible scratch, from Given theordinalnature of thedependent variexisting technologies. is theobviousstarting and Silvey 1957; able,ordered probit point(Aitchison McKelvey and Zavonia 1975). This model posits theexistenceof a latent
2Bueno de MesquitaandLalman'scoding is actually from 1 to5. In addition, they supplement thecrisisdatawith randomly chosendyadyears. This produces a totalof 707 observations. Since these chosenstates hadno crisis randomly interaction, they code thelevelofviolence as zero.In the I include analysis presented onlycrisis events (n = 467) andrescalethedependent variable from 1-5 to0-4. In all other thedataI use areidentical to those in "WarandReason." aspects
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Smith Alastair
Thus forobservavariable, ZA whichdependslinearly upon thecovariates. tioni,

ZAJ
=
XAjiA + 6A,
where XA,j is a (I x kA) vectorof covariates, PA is a (kAx 1) parameter distributed and FA is a randomvariable assumed to be normally vector, a sysvariablehas twocomponents: withmean0 and variance1. The latent and a stochastic on thecovariates, temicpart,whichdependslinearly part, ofthe variabledependsuponthemagnitude The value of thedependent the variableand a seriesof cutpoints,YA. These cutpointspartition latent real line. As ZA i becomes larger,thenit is greaterthanmore of the cut the observed dependentvariable becomes points, and correspondingly The relationship variableand theobserved variable between thelatent larger. is givenbelow. = If-oo < ZAi < yA,O
< ZA < YA,1 If YA,O < ZA,i< YA,2 If YA,1
F-A7 .
then YA,?=
IfyA,2< ZAi < yA,3 If YA,3? ZA,i< +c
= 1 thenYA,i thenYA,i=2 then YA,i 3 thenYA,= 4
Thus, on average, the largerthe systematiccomponent, XAfIA,the thevalue thedependent value is likelyto take.NationB's use of violarger lence can be similarly represented:
ZBJ
=
XB,iPB + ?Bji-
how thelatentvariablemaps into Again, thecut points YB determine we can invariable.In substantive theobservablediscrete dependent terms, thelatentvariableas thepotentiallevel of violencea nationis preterpret paredto use. a standard foranalyzing Ordered method ordinaldata. probit represents In principal, theordered-probit model allows us to estimate the estimating ofindependent variables on thedecisionto use violence.Yetconsider impact Since nation A is prepared theexampleof a powerful to escalate aggressor. thecrisisto a highlevel, nationB is unlikely to escalatethecrisis.This deA and B's decisionsare negatively terrence related. argument suggestthat a different Yetother settings might suggests relationship. If,forexample,the A and B arein dispute is particularly prizeoverwhich valuable,bothnations be prepared to use higher levels of violence.This argument might suggests A and B's decisionsare positively that correlated, i.e., interdependent.
1261
B's for example-alsoaffect Factors that affect A'sdecisions-strength, inXAshould alsoapofthe independent variables decision. Therefore, many this fix is insufficient towarrant the Unfortunately, pearinXBandviceversa. A andB's decisions that independent. Manyvariareotherwise assumption willuseforce, butwehavepoorornonexistent ablesaffect whether a nation are typically asSuchunmeasurable forces measures formany ofthem. tomakeup part varisumed ofthestochastic errors, 6A and 6B* Yetthese decisions in both unmeasurable tous as researchers, affect ables,although ina systematic thestochastic component ofA's and manner. Thus, countries rather A and than treating B's decisions arecorrelated.3 Thisimplies that, probit model as independent univariate processes, a bivariate B's decisions havea biThe latent variables, thepotential levelofviolence, is required. normal with meansXAIA and XBIB, andcovariance variate distribution,
Q
tp
(ZAr)
pA
((XA fPA A2~ XB,iB
1 p P 1)
LZBJ)
interrather control for the than univariate, probit helps Using bivariate, for between decisions. Sucha model doesnot, account however, dependence effects of strategic revealthe thecensoring choice.Somecrisisoutcomes
to the analyst,thatsystematically a variable,unobservable 3AssumethatW represents can be writtenas ZAJ = XAfifA + Wi;A + eAJ and affectsdecisions. The latent structure that themagnitude to whichW afexpresses ZBJ = XB,iPB + Wi;B + eB, where; is a parameter tobe normally The final terms, levelof commitment. fects thenations' eA, and eB,i are assumed themodellookslike a At present and i2B, respectively. with mean0 and variance62A distributed the then with twosetsofcovariates, theXs andtheWs.Ifbothwereobservable, standard regression W A andB can observe although nations byOLS. Unfortunately, estimated modelcouldbe simply assume we can notobserve W.For simplification baseduponit,as researchers andmakedecisions
ZA 552 Therefore, with meanwiandvariance distributed that Wis normally AiA ZBi - XB,i B
N(hifr~ 2yYW2B)
rA ?2A ( SAS
6 ;A;B2 +;2)m2)*
the(('W;A Using the analogyof simpleregression,
in theleastsquares.Abas an intercept is theexpected value of theerror whichis observed term yields the covariancematrix within M and normalizing sorbingthis terminto the intercept (ZB
(ZAJ - XAjP A
-
XB B) )
(P 1 N2((?,where
(o
(1
pY
__
ZA=
A__
AB
B__
__
__
If
is estimated
thenE[ZAi] as a univariate process,
= XAJi3A + P(ZBj - XB,13B) ? XAJ3iA-
1262
Alastair Smith
extent towhich both nations areprepared butfor touseviolence, other outcomes censoring Observed occurs. useofforces doesnot always fully reveal thelevelofforce that a nation wasprepared touse.A straightforward illusis nation toa threat tration B acquiescing nation A. Thisevent from doesnot A wasreally tellus whether tofollow with the threat. Forprepared through a tells us I how decisions are use theory censored. this information tunately, to define rule:therelationship thecensoring between observed outcomes and theplausiblerangeof thelatent variables. with Thus,in common Tobin's truncation model (1958)orHeckman's selection model (1976,1979; also see DubinandRivers vari1989),thevalueoftheobserved dependent ableimposes restrictions on therange theunobserved ofvaluesthat latent variable cantake. 4.2 Censoring Rule Before a general I use four venturing excensoring rule, hypothetical amples toillustrate what crisis tellus about different outcomes thewillingnessofnations a lowlevelcrisis, touseforce: a war, violence limited byA, andmilitary mobilization. I discuss ineachofthese decision events making andexplain howthedependent a nation's to use viovariable, propensity The decision-making lence,is censored. in Figures 1 stepsareillustrated 2 the Table summarizes through 4; between comparisons andacpotential tualviolence.
A Low-levelCrisis
occurs between A andB. Although nations in disSupposea dispute neither threatens nation the other. 1 plots thelatent agreement, variFigure levelofviolence, able,A'spotential onthehorizontal axis.Thevertical axis is B's potential levelofviolence. The dashed linesrepresent thecutpoints common inan ordinal discrete-choice model. Neither nation escalates thecrisis. Nations thecostofescalating regard the crisis as toolarge tojustify benefits. Inthis any possible case,A'spoten= 0. Similarly, tialviolence, is lessthanYA,O ZA, B is not touseeiprepared = 0. The shaded ther 1 repreviolence orthreats. ZB < YB,o areain Figure the sents possible for thelatent range In this variables. case no information is lostthrough censoring. Neither sideusesforce; neither sideis prepared to do so.
A Full Scale War
Incommon with Figure 1,this event starts with a disagreement between A andB. Suppose events turn outdifferently. First, nation A threatens nation B. Second, B returns nation the threat. inresponse, Third, A launches nation a limited attack against B. Fourth, B retaliates with an all outuse offorce, which A finally nation reciprocates.
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Figure 1. A Low-Level Crisis

r
a'4
~~~~(YA et^=0
4
. ;1
1 _F_
M_*_f_------
~
-
---
~r
1 ..
~
.
~~~~~~~~~ I
. . . -----
~~ ~ ~ ~
A -2
*~~~~
*
.-C
0.
4ZA ~
~~~~
4
)4
variablechanges Next considerhow our knowledgeof the dependent to use at that it is it reveals A a makes witheach step.When threat, prepared In of the statistical terms to achieve its objectives. least threats model,A's = na? do not know whether threat tellsus that0 YA,O ZA. At thispointwe bound know the we do not out thisthreat; to carry tionA is prepared upper B is also in step2, we learnthat B issuesa counterthreat forZA.Whennation < = 0 to use threats: prepared YBt ZB. A is preA launchesa limited attack. This revealsthat In step3, nation we its aims. to achieve a limited at attack to use least However, stilldo pared ? In a full-scale notknowifA wouldfight war,YA2 ZA. step4, B launchesa to we learnthatB is prepared this A. From war full-scale retaliatory against it is level of violence: 'YB3 ? ZB < +oo. NationA revealsthat use thehighest itsaims (step5). level of violenceto further to use thehighest also prepared to use and theviolencethey are prepared Thus theviolencebothnations actually use are identical.In termsof the latentvariables we know that YA3 ? ZA < +00 and YB,3 ? ZB < +00, theshadedarea in Figure2. No inforhad thecrisisendedearis lostthough mation However, censoring. strategic aboutpoour that can see we lierwithone nation down, knowledge backing tentialviolence would remainincomplete.The next case considers this eventuality.
1264
Alastair Smith
Figure2. War
TA.3Y<ZA<+dI
:w
I! .li aB
* 0.4 1<Y :vcIc (-e
.......
. J
.' ..
1j
4)-
0~~~~~~.
i0
aspi~~~T.
0, ; A.2
Limited Violence byA
inthis does Unlike the former case theactual useofviolence examples, Hownotcorrespond with ourknowledge about thepotential use offorce. violence. itdoesplacesome onthe values for bounds ever, possible potential In this A threatens B. WhenB responds its nation example, bymobilizing A launches B backsdown. a limited attack. Atthis military, point In thefirst A threatens. A is prepared to use at least We learn that step, < ZA.When 0 = YA,O threats: B mobilizes in step2, itreveals that itis preornot tomobilize. atthis we still do not know whether pared However, point B is actually to use violence. atthis we onlyhavea prepared Hence, point lower bound for B's potential violence. A reveals toa limited that itis prepared touselimited Byescalating war, ina ornot A would violence, although we still do not know whether engage nation full-scale conflict. wenever find outthis information because Indeed, B concedesat thispoint. of thiscrisisis YA= 3 and The actualoutcome about violence is lessprecise. Weknow YB= 2. Yetourknowledge potential B would B's that itis notprepared toactually useforce. although mobilize, ofthe andactual levelofviolence arethesame,YB= 2. In terms potential < ZB <YB,2. Unfortunately, latent we can never thismeansYBJ1 variable, know whether A would the limited violence. A'spoescalate dispute beyond
1265
byNation A Figure3. Limited Violence

B rsalissby
A-;--'ate ..;(Y
B (sp 1). NaznA dnaza nalion

u.tilizin (tp 2). aftwk (step 3). 2).
.A3YB
s-,mited
XBN ;--*-r?--?----X-: 73, 2. .
5103
;ste.'st
tested never occurred. be satisfied with ourlimited knowlThus,we must

A would use at least limited violence, YA,2 ? edge that
ZA
<+00
moreforcebecause theconditions underwhichthatcontingency would be
Mobilization Military Thefinal illustrates an event where itis difficult tobe precise example A threatens B andmobilizes nation its agreeon someissue.Supposethat tobackupitsthreat. Inresponse B concedes. nation Theactual levmilitary els ofviolence usedare 3A =2 and YB =0 Theactual levelofforce usedonly weakbounds onthe provides potenwe lear that A willatleastmobilize tiallevelofviolence. its Specifically, we never forces. this isjusta bluff leamwhether orwhether Unfortunately, A wouldreally backup itsshowofforce. nation B censors By conceding, ourknowledge ofthelevelofviolence that A would use.A actually actually A coulduse force-levels uses force-level 3, butpotentially 3, 4, or 5. We never know. Ourknowledge about B's intent B usesactual is also limited. theforce force level0. Weknow B willnotmatch demonstrated byA (level in a more B might escalation havemadethreats gradual 2), butpotentially
abouteither state'spotential level of violence.Again,supposeA and B dis-
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Alastair Smith
Actualand Potential LevelofForce Table2. Comparison between

Violence by A Figure 2 3 4 5 Event Low-levelcrisis Full scale war LimitedviolencebyA B concedes; A mobilizes Potential 0 4 3 or 4 2, 3, or 4 Actual 0 4 3 2 Violence by B Potential 0 4 2 0 or 1 Actual 0 4 2 0
Figure4. B Concedes WhenA Mobilizes
'YB,3
I-
+0 I < ZA ZA < +_ TA,

C<ZBC
<YB,1 YB,2--
iNation
A mobilizes itsmilitary (step1). In response B backsdown. Finaloutcomes (YA = 2,YB = ).
TI
itcoulduselevel0 levelofviolence is 0, but (level1). B's actual potentially on the or 1. Whilenotprecise, thisinformation letsus place somebounds
latent variables: 'A,1
< ZA < +oo
< and
ZB <YB,1.
5. STRATEGICALLY CENSORED DISCRETE-CHOICE MODEL variable structure and hastwocomponents: thelatent TheSCDC model rule. thecensoring
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VariableStructure 5.1 Latent resolve orpropensity variables eachnation's touse Thelatent represent I assumethat violence. thispropensity depends linearly upona seriesof covariates.
Z.=X43e.Zi = Xi + ei=
i i XA, CZA, 0
ZB.)
0
XBi)
P
(jB)
eAj
eB,)
ofA andB's decisions arecorrelated. Thestochastic components Thus,

E[eieJ = = (p
I,
where -1 < p < +1. The leadingdiagonalsin thisco-
matrix arerestricted to one.Thisidentifying restriction is a stanvariance dard inprobit models. assumption Rule 5.2 Censoring between observable crisis Thecensoring ruledescribes therelationship for Theexamples above andplausible values the latent variables.4 outcomes this Moregenerally: illustrate mapping. If YA,j=
If YA,j> If YA,j< j thenYk,,j-l < Zkj <Yk,,j fork = A,B. < +oo and YB,(YBi-l )-ZBiYBj YB,j then YA,(YA /-,?ZA,i j ZB and B i) ? <YAYA. YB,jthen YA,(YA )ZA,i
B,j=
B
< kB,Y
5.3 Estimation in this to be estimated There arethree parameters model,f, p, andy. we haveno substantive interest Thelatent data, Z, arenuisance parameters; A standard to estimating in their maximum-likelihood estimates. approach outthelatent dataand ofinterest, theparameters j, p, andy, is tointegrate theresulting normalmaximize bivariate find theparameter valuesthat difficulties with likelihood. becauseofconvergence Partly MLE, I use a
re(1999) model.His technique Signorino's this paperfrom 4Thecensoring ruledifferentiates interanalyze)international a specific be usedtomodel(and statistically gamestructure quiresthat thelikeliutilities, which determine affect each state'soutcome howvariables action. He estimates points in thegame.The game states choicesat each ofthedecision willmakeparticular hoodthat outtherelationship between rule.It explains serves muchthesameroleas thecensoring structure making. decision latent structure affecting comesandtheunderlying the values.If Yk is thehighest category then that this does notwelldefine theextreme 5Note bounds are (-oo, 0). category theappropriate for thelowest is +oo. Similarly right-hand boundary
(7k,-1 = 7 Yk,O =? 0Yk,4 = +-)
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Alastair Smith
I do not Although Carlo(MCMC) method.6 chain Monte Bayesian Markov them itis convenient to estimate variables, caredirectly aboutthelatent in themodel. Adding nuisance parameters parameters alongwith theother calleddataaugmentais a technique totheparameter spacetobe estimated let 0 represent all theparameters tobe andWong1987).Thus, tion (Tanner p, , Z) . thenuisance parameters: 0 = (p, estimated including I outline arenotthenorm inpolitical methods science, SinceBayesian all thedetails intheappenframework here anddescribe the basicBayesian ourprior berepresents density function that dix.Let f(0) be a probability Let Y represent all theavailable data:in this liefsabout these parameters.7 levels ofviolence. likelihood ofobserving observable L(YI0) is the case,the Y if . Maximum-likelihood techniques the take value 0 thedata parameters of that maximizes this likelihood, i.e., thevalue 0 estimate 0 byfinding function. of the likelihood finding themode 0 abouttheparameter ourbeliefs Bayes' ruletellsus howto update thedata Y: uponseeing
f(IY=(0)L(YIO)
=
() ( (
. Theprobability funcdensity
beliefs seenthedataY, ourposterior about 0 having represents tion, f(01Y), beliefs, f(0), andthelikelihood, L(0IY). Thenormalizing given ourprior ofthis ofY.Estimates denmarginal density marginal constant, m(Y),is the MCMC exlater used for model techniques are comparison. Bayesian sity to estimates of the numerical of chains calculate Markov ploit the properties more for details). density (see theappendix posterior 6. COMPARING THEORIES Other nations behave theoretiTheSCDC model assumes strategically. crisis decision is cenhence, cal outlooks and, making nonstrategic, suggest of these theoretical we is unimportant.9 Within each perspectives, can soring on thedecision ofindependent variables to use force. estimate theimpact Yetan ability to estimate a variety ofmodels doesnotresolve theissueof
excellent introductions to provide 6CasellaandGeorge (1992) andChibandGreenberg(1993) MCMC techniques. of ,B is that is normally distributed with meanzeroand eachcomponent 7Theprior distribution with meanzeroand variof thecorrelafion coefficient is normal variance 3. The prior distribution ofthecutpoints is defined after a change ofvariable procedure. The ln of ance 1. The prior density with meanzeroandvariance 1. The difis normally distributed thedistance between each cutpoint in favor ofsimple models. fusepriors bias theanalysis thedata,inmaximum-likelihood estiparameters given 8Given that theobjective is toestimate it is as L(0IY) (King 1989). In theBayesiancontext, mation it is common to write thelikelihood likelihood to refer to theconditional of thedata.Of density common to use theterm probability both areequivalent. course, mathematically usingtheordered probit model. 9Thissecondmodelmight be estimated
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consistent, the arelogically both theories is correct. Providing that which perforempirical their is bycomparing them onlywayto choosebetween both arenumerous techniques, testing. There a process calledmodel mance, the all arebasedonassessing comparison; for model andBayesian, classical 10SinceI amalready in working power ofeachmodel. explanatory relative formodelcomparison I calculate Bayesfactors theBayesian framework, models. I alsouse nonstrategic that theSCDC model out-performs andshow theuseofforce. influence covariates toassesswhich Bayesfactors for couldbe responsible that models Supposewe havetwotheoretical in coulddiffer thedata.Call themH1 and H2. Thesemodels generating inthesetofcovariates, assumpForexample, coulddiffer they ways. many bethat rule. Suppose orthecensoring structure, tions thecovariance about modelH1 is rethat theprobability that fore thedatawe believe examining is ourprior belief that m2 thedatais t1.Similarly, for generating sponsible our thedata,we can update model. Having observed modelH2 is thetrue reitl and W2, beliefs, Theseposterior is the true model. which beliefs about ofmarginal likelihoods, bytheratio aregiven spectively,
__
m(YIHi) m1
m(YIH2) 'U2
'U2
ofobserving the likelihood (theprobability wherem(YIHi)is themarginal is derived Y given Thisequation by modelH1 is the true model). that sample likeliTheratio ofthemarginal ofBayes'rule. a straightforward application is greater than one, When theBayesfactor hoodsis calledtheBayesfactor. we infavor ofmodelH1.Alternatively, ourbeliefs thedatatellus toupdate The is small. infavor ofmodelH2 ifthe Bayesfactor beliefs should shift our with likelihood function the is determined byintegrating likelihood marginal thatOH, is thesetofparameters totheparameter Suppose density. respect = JL(Y with modelH1;then OH )f (0Hh IH1 associated m(YIHl) )doHI HI,
-
model direct Bayecomparison. ofBayesfactors allows Thecalculation on a overclassicaltests. First, has several sianmodeltesting advantages models.Second, nonnested can be usedto compare basis,they practical of this means that as theamount tests. areconsistent Loosely, Bayesfactors with clasThisis not true chosen. the model is always correct dataincreases, then thetest levelis chosen ifa 5 percent where sicalmodel rejection tests, ofdataavailable. oftheamount 5 percent willerr ofthetime, independent Theprincipal models. a powerful toolfor comparing provide Bayesfactors
andto endeavor tothemodeltesting a superb introduction 7) provides (1995,Chapter 10Poirier methods. classicalandBayesian between comparisons
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Alastair Smith
ofBayes factors areoften to caldisadvantage is that they extremely difficult culate analytically. Fortunately, we can exploitthepowerof MCMC techniques to providenumericalestimatesof marginallikelihoods(Kass and Raftery 1995; Chib 1995b). I give detailsin theappendix. I estimated the SCDC model fora wide varietyof independent variI report ables. Yet forbrevity, onlythebestperforming analyses.The independent variables,summarized below,are drawnprimarily from Bueno de Mesquitaand Lalman (1992 and 1986).
6.1 Summary ofVariables

A and PowerA:This is theratioof compositepowerscoresfornations B. Ifpa is nation A's composite then power,andpb is B's composite power,
P and PowerB= P pa + pb pa + pb The following variablesare Bueno de Mesquita's compositemeasures, He uses alliance profilesand composite whichhe calls expectedutilities. to estimate measuresof capability theincentives and abilitiesof nationsto fight withone another. Here I onlysummarize theeffect thateach measure to capture. The interested to theoriginal readershouldrefer sources purports formoredetails(Bueno de Mesquita 1982, 1985; Bueno de Mesquita and Lalman 1986, 1992). A of becominginvolvedin a war EAUAB: A's estimate of thevalue for withB.1I of thevalue forB of becominginvolvedin a war EAUBA: A's estimate withA. EBUAB: B's estimate of thevalue forA of becominginvolvedin a war withB. EBUBA: B's estimate ofthevalue forB of becominginvolvedin a war withA. POLES: The number of powerpoles in thesystem. Is thesystem hegeor multipolar? monic,bipolar, WARPRED: Bueno de Mesquita and Lalman (1992) theoretically predictedprobability that an eventends in war.
PowerA=
6.2 Which ModelsPerform Best?

Do nations behave strategically duringcrisis escalation? Bayesian model comparisons suggestthattheansweris unambiguously yes. Table 3 Model 1 is the bivariate-ordered compares threemodel specifications.12
IIIn Buenode MesquitaandLalman(1992) this variable is calledEIUIJ.I have substituted A fori andB for tokeepthenotation consistent. j throughout 12The comparisons between thethree structural specification areonlyreported fora singleset of independent butthepattern forall other variables, showis similar combinations of independent variables.
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ofVarious ModelstoExplain Table3. Comparison Structural ofInternational theEscalation Crises

Model 1 Bivariate Ordered Probit Parameter ONEA EAUABA
EBUBAB
Model 2 SCDC
Model 3 SCDC p =O
Posterior Posterior Posterior Posterior Posterior Posterior Mean StD Mean StD Mean StD 2.201 0.053 0.485
0.119
0.167 0.074 0.062

0.075
2.582 0.174 0.850

0.142
0.252 0.092 0.090

0.083
2.697 0.228
0.200
0.252 0.111 0.086

0.088
ONEB p
0.788
0.686 0.991 1.808 3.000

0.095
0.032 0.160 0.164 0.176 0.018 0.051

0.071
0.575 0.788 1.768 3.211 0.249 0.862

1.511 -902.51 -932.35
0.065 0.253 0.255 0.260 0.070 0.087
0.000 0.752 1.714 2.967 0.231 0.836

1.416 -921.65 -948.64
0.000 0.209 0.258 0.257 0.057 0.082

0.092
YA,1 YA,2 YA,3

YB,1
YB,3
YB,2
0.540
1.159
0.101
Log-Likelihood -1185.81
LogMarginal
Likelihood
-1220.19
probit model,model2 is theSCDC model.Model 3 is also theSCDC model in theerrors is zero.The ln butwiththelinearrestriction that thecorrelation marginallikelihoods for each model are -1220.2, -932.6, and -948.6, respectively. the othermodel specifications. Model 2 overwhelmingly outperforms For example,theBayes factor models 2 and 3, whichdiffer comparing by The implitherestriction p = 0, is exp(-932.32 - (-948.64)) = 1.2 x 107.13 whenmaking decisionsin international consider cationis that crises,nations theexpected The Bayes factor model behavior oftheir opponent. comparing 2 withmodel 1 is evenlarger. This lendsempirical to mytheoretical support thatcounterfactual deciarguments analysisis essentialforunderstanding sionmaking in crises.Empirically theSCDC modelexplainsthebehavior of nations modelssuchas theordered model. farbetter thannonstrategic probit
theorderof magnitude of the 13Jeffreys (1961, Appendix B) proposeda scale to interpret infavor is greater decisive evidence of Bayesfactor. WhentheBayesfactor than100,this represents thefirst model.
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Alastair Smith
6.3 WhichCovariates Affect CrisisBehavior?

Different theories of crisisescalationsuggestthatdifferent factors are important in theuse offorce. Table 4 showstheimpactof different independentvariableson theuse of forceforthebestperforming models. for Model 1 is a null model, containing only a constant (or intercept) each country (ONEA and ONEB). Model 2 capturesthe flavorof powerbased theoriesby incorporating variablesthatmeasuretheratioof power between thedisputants. Bothmodels3 and 4 use Bueno de Mesquita'scomhis expectedutility of war.Model 4 combines positemeasurefrom theory of thesecompositeswithpower measures.Model 5 examinesthepolarity thesystem (poles). Model 2 shows thatthe stronger nationA is relativeto nationB, the B is increasingly higherthelevel of forceit is preparedto use. Similarly, morepowerful. willingto escalate thecrisisas it becomes proportionately 0 and 1 so subYettheserelationships arenotstrong. Powerrangesbetween the influenceof it explains littleof the variance. Statistically, stantively meanswiththeposterior poweris also weak. Comparing theposterior stanat the5 percent dard deviations reveals thecoefficients are not significant level in a classical test.Ratherthansimplylooking at the coefficient for allow us to comparethismodel withtheexplanatory power,Bayes factors between likelihoods models 1 and powerof thenull.14The ratioof marginal 2 is exp(-936.22 - (-936.01)) = .81. This indicatesthatwe shouldslightly in thepower-based model relativeto null. The data reduceour confidence fortheroleof powerin influencing crisisbehavior. provideslittle support Models 3 and 4 show thatBueno de Mesquita's compositemeasures have greater impacton crisisdecisionmakingthanpower.A is morelikely to escalate whenthecompositevariablesEAUAB and EAUBA are large. A's estimate of thevalue of warforitself and fornaThese variablesreflect B is likelyto escalatea criWhenEBUBA is large,then tionB, respectively. of its value from A. The sis. The variableEBUBA is B's estimate fighting likelihood associatedwithmodel 3 is thelargest all modmarginal amongst This meanswe shouldshift other models els tested.'6 ourbeliefsaway from and towardsthismodel (even though the support forthismodel is stillnot For example,theBayes factor model 3 withthe overwhelming). comparing
ofdifferent ofboththeBayesfactors 14The posterior comparison modelscontains aspects and theprior beliefs. HereI compare models with reference totheBayesfactors only;implicity I assume flat prior acrossall models. However, giventhevaluesoftheBayesfactors, prior beliefs havea big impact on posterior beliefs does notaffect 15Fearon a theoretical for (1994a) provides the explanation whyrelative power escalation ofcrises. different modelsweretested andcon16Approximately forty usingthefullrangeofvariables trols within Buenode MesquitaandLalman'sdata.
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Alastair Smith
- (-936.01))= 38.9. Thismeans nullmodel is exp(-932.35 that having obshift infavor served the data, we should ourbelief ofmodel 3 rather than the nullbya factor of39. Although Buenode Mesquita's composite measures variables for theescalation ofcrises arethebestexplanatory those among 17 tested, these measures still Models4 and5 perform better perform poorly. than both worse than model 3. Model5 suggests the nullmodel, yet perform ofpolesincreases will that the number thelikelihood that nations increasing crises. escalate that thedatasuggest Buenode Mesquita's meaAlthough composite are stillweak. suresinfluence decision making during crises, theresults andcensoring of strategic choicearetaken Once interdependence effects into consideration, few explanatory variables appear tohavea large effect on decision making. Signorino's (1999) analysis ofthis dataalso finds similar Thissuggests that results negative results. many established might be artiof methods facts using toexamine interactions. inappropriate strategic 7. CONCLUSION Modelsofstrategic choice that variables arecensored andintersuggest dependent. Traditional statistical linear methods, basedonthe model, areinfrom under suchcircumstances, andinferences drawn suchproappropriate In order to showwhy cedures arewrong. conventional failand techniques I examhowthelinear model canbe adapted these toovercome limitations, inedecision making theSCDC method during international crises. Although behind is is specific tocrisis themotivation the developed escalation, model toall strategic-choice models. I askhowaredecisions general Specifically, related andwhat do political outcomes tellus about theactions that political actors totake. might be willing Rather than treat decisions as independent, I relate theunderlying willtotake ingness ofeachactor actions through a bivariate latent-variable strucformulation thesimplelinear ture. The latent-variable preserves model while with the relate actors' structure dealing dependences that choice which arerepresented as discrete variables. a multivariate rather unithan Using variate design captures thecontingent that decision-making processes lie at theheart ofgame-theoretic analyses. is an explicit Gametheory ofcounterfactuals. It askswhysome study while others are are avoided. the observed paths selected, outcomes Thus, areas much a result oftheconsequences ofunrealized as they eventuality arethe ofdirectly result observable outcomes factors. Yetobservable contain
171 use diffuse forall theunknown priors which to faparameters. Unlikeclassicaltests, tend vor complexmodels,diffuse priorsmeanthatBayesianmodel testsare biased towards simple models.
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someinformation to which about theextent areprepared to act.A nations theoretical understanding ofstrategic choiceallowsus to relate outcomes intoinformation aboutchoices. Thismapping, thecensoring tellsus rule, which decisions arecensored. Thus, we candistinguish between theactions that actors choose, those actions that they do notselect, andthose choices that we do not havean opportunity toobserve. While this paper focuses onthe specific example ofcrisis escalation, the implications aremore general. Ifwebelieve that political actors behave strategically, then standard econometric techniques basedon thelinear model areoften inappropriate. Estimates obtained from suchprocedures areincorrect andhence prevent us from comparing different models. Theory building requires adequate testing ofourmodels. Theories involving strategic-choice make explanations precise predictions about therelationship between decisionsandhowdecisions arecensored. Thisinformation should be incorpointo rated anyempirical procedure.
submitted Manuscript January 20, 1998. Final manuscript received April20, 1999.
APPENDIX Simulation Techniques

The modelrequires estimates of ,p,y,andZ. The MCMC technique involves seestimates quentially updating abouteach ofthese andSmith parameters (Gelfand 1992; Gelman1992).Before thefull itis illustrative todiscusstheestimaexplaining model, tionofa single theparameters parameter. The only Supposethat p,y, andZ areknown. unknown toestimate ofthedatagiventheparameters is f. The likelihood parameter normal ,p,y, andZ is a bivariate density,
L(y3p,,z)=
+XjJ expi 2[X(Zi

P
xif)' Q-1 (Zi - Xi)j
whereQ
f is toobserve Thekeytoestimating that giventhelatent variable, Z, thelikelihood is equivalent tothestandard linear model. TheBayesian for this modelis a stanupdate dardresult. Iftheprior of f is normally distributed with mean andvariance density theposterior of f is also normally density distributed. Specifically, Bo, then
Po
fQlY)
Nk(,B1 ),whereB= Bo 1+XiQ?iXi)
and D =B Bj
1 0 +jXQ1zi)'
1276
Alastair Smith
The keypoint aboutthisestimate of a is independent of is that theposterior density Y given Z. Thus,if p,7, andZ areknown then itis easytodrawa random samplefrom theposterior of P3. One can use thisrandom theexpected density sampletocalculate valueof P, itsstandard itsmedian, oritsinter-quartile deviation, range.
Gibbs Sampling
As a heuristic, I assumed theparameters Thejointpostethat p,y, andZ areknown. hard to calculate as rior density ofall parameters is extremely analytically. However, of P is straightforward to calculate. The demonstrated above,theconditional density ofall the this toestimate the Gibbssampling algorithm exploits property jointdensity theestimate intoa seriesofconditional parameters bybreaking densities. As an intermediate theunivariate, choiceprobit model(the consider step, binary The standard modelthere is a single toestimate, probit model).In this parameter P3. MLE involves outthelatent which variable a likelihood integrating parameter produces is a CDF ofa normal function that variable (Greene1990).The MCMC approach a random itsconditional (Albert andChib 1993) draws sampleforP from density given drawof P, a drawis madefrom theconditional ofZ. The condiZ. Giventhis density Forexample, ifobservation i is Yi= 0 tional ofZ is straightforward to simulate. density is negative. latent then thelatent variable variable is Therefore, 1)-the TN[,o] (XiP, Zi normal overtheinterval 1. If distributed truncated [-o-,O],with meanXijandvariance is repeated thedraws from this for a largesamplethen each conditional procedure between to the density converge jointposterior density. Thus,iterating sampling P and of1. Z provides theposterior sampling a convenient waytoestimate density an introduction tothetechniques for The aboveexamples the provide estimating there ofsubstantive SCDC model.In this arethree application parameters interest, p, P5, with thelatent variable arefour andywhich areaugmented Z. Thismeansthere sepaThe Gibbssampler is an iterative Within eachiteration itcycles rate blocks. procedure. on thecurrent eachoftheblocksdrawing a random valueof through sampleconditional three blocksandthedata.Let thenotation thedistribution ofj theother [jlh,i] represent on h andi. conditional
The Gibbs Sampler

values 0(0) = (P(0),p(0),Z(0),7(0))andsetg = 0. Step 1: Specify starting Step2: Simulate
from Z(g 7 g P(g+1) [P(g+,)|Y,p(g),

Step3: Simulate
, Z(g,7g) p(g+l) from[p(g+1)|Y,3(g+1)
Step4: Simulate
Z(g+l) from[Z(g+1) Y f5(g+l),P(g),7(g)
OF STRATEGIC CHOICE TESTING THEORIES Step5: Simulate

y(g+1)from[Y(g+1)|Y,3(g+1) p(g+1),Z(g+1)
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Step6: Setg = g + 1, andgo to step2. we cyclethrough thesequence we obtain a sample from theposterior Each time of 1,p, Z, andy.Providing that thechaindefined abovesatisfies certain regulardensity thedraws from to theposterior ofthe ityconditions, thesampler converge density The algorithm a straightforward method to estimate all the parameters. represents in themodel. parameters
from theConditional Densities Simulating

four oftheGibbssampler conditional densities: Implementation requires simulating (g+1) y(g) ] and , j,p(g) Z(g),y(g)], [Z(g+1)|Y [(1) p(g+l),ry(g)], [p(g+1) jY,(g+1) Z(g) arestraightforward to simulate; The first twodensities [Y(g+1)lY,3(g++1),p(g+1),z(g+1)]. an additional calledtheMetropolis thelatter tworequire accept/reject algorithm Hastings algorithm.
Simulating .f It requires a k-variate vector ofnormal The simulation of is straightforward. drawing ~~~~~~~~~~~n I mean f andvariance random variables with B1, whereB = Bo1 + XiQ-Xi' , and
^
i=l~i= n
thedatawith The simulation of fis considerably the simplified byaugmenting in thesimulation Z. The latent variables areunobservable; latent variables, however, drawno problems as we simulate them. The simulation this requires context, presents variable with theappropriate mean(Albert andChib normal random inga truncated and YB,iv 1993;Chib 1992).If,for example, giventhevaluesofYA,i ZAi liesbetween y1andy2 thenZ,1,it - TN177Y2](9AJ, l-p2), where LAJi= XAJPA +P(ZBJ-XB,i2). from a truncated normal The following algorithm efficiently samples then andu is a uniform random number Ifx TN[p,qj(g,&y2) distribution. x = g + c(D-1 ((D((p - ji)/a) + u(D((q - g)/6) - ((p - )/))), represents a random drawofx.
theLatentVariables, Z.Simulating
theCorrelation Simulating Coefficient, p.Theposterior of pIY,3,Z,yis nota standard distribution. Hencegenerating a density theMetropolis-Hastings random drawfrom this distribution algorithm requires et.al. 1953). (Hastings 1970;Metropolis
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Alastair Smith
The Metropolis-Hastings Algorithm

after The M-H algorithm generates a sequenceofelements which, theinitial bum-in period, represent a random drawfrom thetarget density, p( pjY, ,Z,y). Giventhecurin thesequence, rent elements I use a candidate generating density, q(.,.), togenerate the in thesein thechain.Let p(g)represent element next potential element thecurrent theMarkov chainconthepotential candidate. To ensure quence,andletp(C)represent thereversibility thetransition kernel must verges tothetarget density, satisfy condition that (ChibandGreenberg 1995a).Thisimplies
,t(p(g))q(p(g), p(C)) = t(p(c))q(p(c), p(g)),
that thecandidate where q(p(g), p(O) is theprobability generating algorithm chooses in thesequencep(g),andit(.) is theinvariant element candidate p(c) giventhecurrent In this case theinvariant density beingsimulated. density, R(.) = p( pIY, 3, Z,y),is proportional tothelikelihood, bytheprior, p(p). In thecases ofP p(YII,p,Z,y),multiplied is satisfied andZ, theGibbssampler ensures this condition becauseituses thecondiitis difficult tional densities as thecandidate to generating density. Unfortunately, use an alternative fromp(pjY,P,Z,y),andwe must simulate directly candidate-generatIn particular ingdensity. Thismeansthat thereversibility condition is notsatisfied. the for chainis moving more often than itshould. To correct this to somecandidates the in thesequence. chainshould notalwaysmovetothenext element The probability of with newcandidates theprobability which areacmove, ex(p(g),p(c)), determines ofthechain. is selected toensure cepted.cx(.,.) reversibility eachcycleoftheGibbssampler, a drawfrom theconditional ofp is Within density as follows: generated
p(C) from 1. Giventhecurrent p(g), selecta candidate thecandidate generating density, q(.,-)-
ofmove,ca(p(g),p(C)) = MIN 1,7(p(c)q(p(,p()) theprobability 2. Calculate
~T(p(g)q(p(g)9p(c))
conditional ofp giventhedata,Y andtheother i(p) is thenonstandardized density parameters. u - U(O, distribution: 3. Drawu from a uniform 1). setp(9+l) = p(c); else setp(9+l) = p(g). 4. If u < Cx(p(g),p(C)) then walk.Specifically, The candidate-generating density p(C)q(p(c), p(g)) is a random variable with mean0 andstandard random deviation p(g)+ gp,where ,p is normal . The noninformative prior is that p - N(O,1).Therefore, theposterior density of n. on thedataandother is p conditional parameters 1.6 it(p) -n jQj-xp 2
2
}jwhr
},where
exp -j(Zi
2_
n
-
Xi0)'Q'
(ZI-wer
(Zi -Xi)
whereQ = (1
P) '
thenormalization factor ofthis does nothavetobe calcuNotethat posterior density andthecandidate latedsinceitis thesamefor boththecurrent valuesofp.
THEORIES OF STRATEGIC CHOICE TESTING
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theCut Points, Simulating y.Albert andChib(1993) describe a simple algorithm forsimulating thecutpoints from thelatent variables. To provide a simple thesingle illustration, consider simulating cut YAJ1 Let V represent thesetofobservations where givenall theother parameters. is the cut for i the standard rule these would be YA,1 upper point ZA (for probit censoring events where thesetofevents that have YA'1 as a lowercutpoint YA,i=1). Now consider thestandard to (YA = 2 for model).Call thissetofeventsV. Thisis sufficient probit define thelikelihood. Notethat if YA,1 is less than thelargest ZA i suchthati E V then this observation is impossible. if YA,1> maxZA i then theobserved largest Similarly, The likelihood is non-zero datais impossible. thosevaluesof YA,1 between the onlyfor largest lowerlimit andthesmallest upper limit:YA,1E [maxZA j,mEirnZA,il. Similar
LYJE iceV
ieV
'
results holdfor all theother cutpoints. Thisalgorithm a simple mechanism to provides thecutpoints. generate the Albert andChibalgorithm is notefficient. As thesamplesize Unfortunately, ineach binrises. As a result ofthebinsbecoming risesthenumber ofobservations full, ofytraverse thesamplespaceextremely Thisleadstoextremely thesamples slowly. between draws andslowconvergence. highserialcorrelation
theCut PointsUsinga Metropolis-Hastings Simulating Step

To reduce thehighlevelsofautocorrelation between draws itis convenient tosimulateZ andyin a single with the Metropolis-Hastings step.Theproblem implementing M-H procedure is finding a suitable candidate generating density (Chib 1996).Genereachofthecutpoints introduces between ating sequentially largeserialcorrelation areovercome draws. Theseproblems ofvariable Instead of byusinga change operation. I work with thecutpoints with binsize is the working directly, ln(bin size),where distance between cutpoints.
XA,2 Define XA=
XA2m-l
=ln
'Y A,12
YA,2-l{YA,m-2
Notethat ofX is a member defined. Each component oftherealline. XBis similarly Thislackoforder restriction itallowsa simple on X has twoadvantages. random First, walktobe usedfor thecandidate-generating areeasilyspecified density. Second,priors overtherealline.I assumethat eachcomponent with ofX is distributed mean0 and variance 1. The algorithm is implemented as follow: 1. Convert thecurrent ofcutpoints vectors intovectors ofk(g). 8(g) a candidate 2. Generate walk: X&c)= 2(&)+ ;, where; is normally usinga random 0 distributed with mean andstandard deviation 0.05.
1280
Alastair Smith
3. Convertthe candidate ?(c) into candidate cut points y(C).
) = MIN{1,7t(c))q(y(c),y( ofmove, c(y(g),y(c) theprobability 4. Calculate
))
}.
density for the in calculating theposterior density, that theprior should be noted 7t(y) lognormal. cutpoints is distributed u - U(O, 1). distribution: a uniform 5. Drawu from 6. If u < c(y(g),y(c)) thenset y(g+1) = y(c) and draw new values forthe latentvariables varilatent theexisting above;else set y(g+1)= y(g)andretain Z(9+1)as described
ables, Z(9+l) = Z(g)
is thegivenbyinteofmovecalculation for theprobability required The likelihood cutpoints: theappropriate density between normal grating a bivariate L(YI{y1) C= fJAhioh
j=1A,ow
fBhioh 4(XAi3 7A, XBJiB,P)dZAdZB, where

'YB,low
P(XAA37 XBB,i
P) =
1 -1 exp-2 27) X
(ZA - XAjfA
ZB -XB,ifB)
U-1(ZA
- XAjA3 XB,if1)j
(ZB
variable. giventhedependent cutpoints The limits oftheintegration aretheappropriate
PracticalAspectsofImplementing theChain
Specifiissuestoconsider. toconvergence there areseveral practical With respect correlated aredrawsfrom the howlongdoes thechainneedtobe,howhighly cally, valuesaffect thedraws from the howlongdoes thechoiceofstarting andfor sampler From a practical toanswer these questions. chain? Therearefewtheoretical guidelines of 1,000iterations anda chainlength of5,000iteraa "bum-in" beyond perspective, ofthechain. thehigh tobe little in theproperties To reduce tions there change appears I subsample draws, taking from theoutput draws, between levelsofautocorrelation The algorithm in GAUSS. Each modeltypically was implemented iteration. every15th at torun. The code anddatausedareavailableon theinternet takesaboutan hour www.yale.edu/plscSO6a.
MCMC Output CalculatingBayes Factorsfrom

themarginal likelihood Basic MarginalDensity Identity. Chib(1995b) recognizes constant oftheposterior as thenormalizing density, m(YIH) = f H)().This (IY,
any0. which Identity," holdsfor likelihood Chibcalls the"Basic Marginal relationship, itis useful themarginal at a likelihood convenience toevaluate Forcomputational I set 0* = (P*,p*,y*)equal to thesamplemeansfrom the with highdensity. region likelihood andestimate themarginal as follows: Gibbssampling output
1281
- Inp(9*jY, Inm(yjH) = Inf(Y|6*, H) + Inp(9*IH) H)
(1)
The prior density andlikelihood aresimple toevaluate; however, theposterior density requires additional simulation. HereI implement theprocedures described in Chiband Greenberg (1995b). Posterior Density Evaluated at (j*,p*,y*). The posterior density of0*can be expanded:
*Y)P(Y*IY) p( P*Y*Iy)=P( IP Y*Y)P(P*Iy
(2)
The expansion can be performed in several ways.The advantage ofthis order is that those components that arehardto simulate, from reruns ofthesampler. y,areexcluded The first term ofEquation 2 can be further expanded:
P(
IP Y YY) I P(P* IP, y*,Y,Z)p(ZIY)dZ,
a simulation consistent estimate ofwhich is givenbythefollowing formula:

P(* Ip '7 Y) = G z(
IY'P
Thisis evaluated byrerunning theGibbssampler with p fixed at p*andthecut fixed atr. Whilethisis time-consuming itdoes notrequire points additional programing. The secondterm ofEquation 2, p(p* Y) ,is also estimated byrerunning the *lY*, with thecutpoints fixed aty. The posterior oftheresulting sampler density draws is estimated usinga univariate kernel-density method (Silverman 1986).The final term ofEquation 2 is estimated bya multivariate normal kernel-density method from the draws ofthesampler. original As thenumber ofcutpoints becomelarge, high dimenmakesitdifficult toestimate this The dimensionality sionality density. ofthekernel method can be reduced thecutpoints bydividing intotwoblocks.Unfortunately, this meansrunning thesampler an additional fourth time.
REFERENCES
Achen, Christopher H. 1986.TheStatistical Analysis ofQuasi-Experiments. Berkeley: of University California Press. Aitchison, J.,and S. Silvey.1957. "The Generalization of Probit to theCase ofMultiple Analysis Responses." Biometrika 44:131-140. Albert, J.,and S. Chib. 1993. "BayesianAnalysis of Binary and Polychotomous ResponseData. Journal American ofthe Statistical Association 88:669-679. Bloom,David E., andMarkKillingsworth. 1985. "Correcting for Truncation Bias Causedbya Latent Truncation Variable." Journal ofEconometrics 27:131-135. and ScottGates. 1997. Working, Brehm, John, Shirking, and Sabotage.AnnArbor: of University Michigan Press.
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Alastair Smith
Brehm, John, andJames T. Hamilton. 1996."Noncompliance inEnvironmental Reporting: AreViolators Ignorant, orEvasive,oftheLaw?" American Journal ofPoliticalScience40:444-477. Buenode Mesquita, Bruce.1982.TheWarTrap.New Haven:Yale University Press. Bueno de Mesquita, Bruce. 1985. "The WarTrapRevisited." American PoliticalScienceReview 79:157-176. Buenode Mesquita, Bruce, andDavid Lalman.1992.War and Reason.NewHaven:Yale University Press. Buenode Mesquita, Bruce, andDavid Lalman.1986."ReasonandWar." American PoliticalScience Review80:1113-1131. Buenode Mesquita, Bruce, James D. Morrow andEthan R. Zorick.1997."Capabilities, Perception, andEscalation." American PoliticalScienceReview 91:15-27. I. George.1992."Explaining theGibbsSampler." Casella,George, andEdward TheAmerican Statistician 46:167-174. fortheTobitCensored Chib,Siddhartha. 1992. "Bayes Inference Regression Model." Journal of Econometrics 51:79-99. for andMCMC methods. Chib,Siddhartha. 1996.Parameterizations ordinal probit models Working paper, Olinschoolofbusiness, Washington University. Chib,Siddhartha, andEdwardGreenberg. 1993. "Markov ChainMonteCarloSimulation Methods inEconometrics." Econometric 12:409-431. Theory and EdwardGreenberg. Chib,Siddhartha, 1995a. "Understanding theMetropolis-Hastings AlgoTheAmerican rithm." Statistician 49:327-335. andEdwardGreenberg. andMaximum Likelihood Chib,Siddhartha, 1995b."Bayesian of Analysis Multivariate Probit Models."Unpublished manuscript. Washington University. Likelihood from theGibbsOutput." Chib,Siddhartha. 1995b."Marginal Journal oftheAmerican 90:1313-1321. Statistical Association Bias inLinearRegression, Dubin,Jeffrey A., andDouglasRivers. 1989."Selection LogitandProbit Models."Sociological Methods and Research 18:360-390. ofChicago. Effects andDeterrence." Fearon, James D. 1993."Selection Working paper. University DisFearon,James D. 1994a. "DomesticPolitical Audiencesand theEscalationof International 88:577-592. American PoliticalScienceReview putes." theBalance of Powerand Interests." James. versus Journal Fearon, 1994b."Signaling of Conflict Resolution 38:236-269. InofU.S. NuclearPowerPlants: Feinstein, Jonathan Regulation S. 1989. "The Safety Violations, andAbnormal Occurrences." Journal 97:115-154. spections, ofPoliticalEconomy Controlled Estimation." Jonathan Journal Feinstein, S. 1990. "Detection ofLaw and Economics 33:233-276. ScottSigmund and Randolph M. Siverson.1996. "WarExpansionand WarOutcome." Gartner, 40:4-15. Journal Resolution ofConflict To Calculating A. E., andA. F. M. Smith.1992. "Sampling Based Approaches Gelfand, Marginal American Densities." Journal StatisticalAssociation 85:398-409. ofthe andNon-iterative A. 1992."Iterative Simulation Scienceand StaGelman, Algorithms." Computing tistics 24:433-438. (Interface Proceedings) Politics:A Summary Gibbs,Brian,and J.David Singer.1993. Empirical Knowledge of World of on World Conn.:Greenwood. 1970-1991.Westport Research Quantitative Politics, Interstate Gochmann, Charles,and Zeev Maoz. 1984. "Militarized Disputes,1816-1976: ProceandInsights." Patterns Journal Resolution 28:585-616. dures, ofConflict William NewYork:MacMillan. H. 1990.Econometric Greene, Analysis. of Industry KevinB., MichaelC. Munger, and BrianE. Roberts. 1994. "The Determinants Grier, American PoliticalScienceReview 88:911-926. Political 1978-1986." Activity, Carlo Sampling Methods W.K. 1970."Monte Hastings, usingMarkovChainsand TheirApplications." Biometrika 57:97-109.
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Testing Theories of Strategic Choice: The Example of Crisis Escalation Author(s): Alastair Smith Source: American Journal of Political

Choice: Theories ofStrategic Testing ofCrisisEscalation TheExample

TESTING THEORIES OF STRATEGIC CHOICE

TESTING THEORIES OF STRATEGIC CHOICE

TESTING THEORIES OF STRATEGIC CHOICE

Table 1. Nation A's Strength and Its Observed UsedofForce

Probit 4.1 Ordered Model

Thus forobservavariable, ZA whichdependslinearly upon thecovariates. tioni,

IfyA,2< ZAi < yA,3 If YA,3? ZA,i< +c

= 1 thenYA,i thenYA,i=2 then YA,i 3 thenYA,= 4

TESTING THEORIES OF STRATEGIC CHOICE

((XA fPA A2~ XB,iB

the(('W;A Using the analogyof simpleregression,

thenE[ZAi] as a univariate process,

= XAJi3A + P(ZBj - XB,13B) ? XAJ3iA-

TESTING THEORIES OF STRATEGIC CHOICE

Figure 1. A Low-Level Crisis

* 0.4 1<Y :vcIc (-e

Limited Violence byA

TESTING THEORIES OF STRATEGIC CHOICE

byNation A Figure3. Limited Violence

B (sp 1). NaznA dnaza nalion

XBN ;--*-r?--?----X-: 73, 2. .

tested never occurred. be satisfied with ourlimited knowlThus,we must

moreforcebecause theconditions underwhichthatcontingency would be

Actualand Potential LevelofForce Table2. Comparison between

Figure4. B Concedes WhenA Mobilizes

+0 I < ZA ZA < +_ TA,

A mobilizes itsmilitary (step1). In response B backsdown. Finaloutcomes (YA = 2,YB = ).

TESTING THEORIES OF STRATEGIC CHOICE

ofA andB's decisions arecorrelated. Thestochastic components Thus,

where -1 < p < +1. The leadingdiagonalsin thisco-

TESTING THEORIES OF STRATEGIC CHOICE

6.1 Summary ofVariables

6.2 Which ModelsPerform Best?

TESTING THEORIES OF STRATEGIC CHOICE

ofVarious ModelstoExplain Table3. Comparison Structural ofInternational theEscalation Crises

0.167 0.074 0.062

2.582 0.174 0.850

0.252 0.092 0.090

0.252 0.111 0.086

0.686 0.991 1.808 3.000

0.032 0.160 0.164 0.176 0.018 0.051

0.575 0.788 1.768 3.211 0.249 0.862

0.065 0.253 0.255 0.260 0.070 0.087

0.000 0.752 1.714 2.967 0.231 0.836

0.000 0.209 0.258 0.257 0.057 0.082

YA,1 YA,2 YA,3

6.3 WhichCovariates Affect CrisisBehavior?

TESTING THEORIES OF STRATEGIC CHOICE

APPENDIX Simulation Techniques

+XjJ expi 2[X(Zi

xif)' Q-1 (Zi - Xi)j

Nk(,B1 ),whereB= Bo 1+XiQ?iXi)

The Gibbs Sampler

from Z(g 7 g P(g+1) [P(g+,)|Y,p(g),

OF STRATEGIC CHOICE TESTING THEORIES Step5: Simulate

from theConditional Densities Simulating

The Metropolis-Hastings Algorithm

ofmove,ca(p(g),p(C)) = MIN 1,7(p(c)q(p(,p()) theprobability 2. Calculate

THEORIES OF STRATEGIC CHOICE TESTING

theCut PointsUsinga Metropolis-Hastings Simulating Step

3. Convertthe candidate ?(c) into candidate cut points y(C).

- Inp(9jY, Inm(yjH) = Inf(Y|6, H) + Inp(9*IH) H)

Y)P(YIY) p( PYIy)=P( IP YY)P(PIy