Signaling and perception in international crises: Two approaches

Abstract

This study contrasts the rationalist and psychologist approaches to information failure as the cause of crisis escalation and war. Building on the psychological insights on misperception, it presents a simple game-theoretic model of crisis bargaining, where signals are subject to perceptual errors and thereby multiple interpretations. The model allows us to analyze the interplay between the problem of misrepresentation in sending signals and the problem of misperception in forming beliefs. The analysis offers a rationalist logic of signaling and perception, which links Bayesian learning, incentive problems, misperception, and war. The analysis also shows that misperception generates more than pathologies in crises—misperception, under the right condition, makes signals fully informative, reduces the risk of war, and attenuates the adverse impact of incomplete information on the risk of crisis escalation and war.