Poliheuristic Theory, Bargaining, and Crisis Decision Making

Abstract

In the past decade, the application of the Poliheuristic (PH) theory to foreign policy decisions of various types, by numerous leaders, and in association with different research methods, has demonstrated its theoretical merit in integrating the divided rational choice and psychological/cognitive approaches. This article argues for a complementary relationship between PH and formal theory. On the one hand, PH can provide a framework in which abstract formal models can be connected with specific domestic as well as international circumstances. On the other hand, formal theory sharpens the rational analysis used in the second conceptual stage of PH. In this study, I formulate a revised Rubinstein bargaining model with war as an outside option and apply it to Chinese crisis decision making during the Second and Fourth Taiwan Strait Crisis. In sum, this study makes three contributions to the literature on international crises and foreign policy analysis. First, it gives formal explanations on how PH can contribute to the game-theoretic approach in foreign policy analysis. Second, it presents what Bueno de Mesquita and Lalman (1992) called a “domestic politics version” of the canonical Rubinstein bargaining game, connecting international interactions with individual participants' domestic politics. Finally, it provides a way to test abstract game-theoretic models in particular domestic and international contexts of foreign policy making.