Improving Empirical Applications of the Expected Utility Theory of War

The researcher proposes an examination of three likely sources of regional and temporal variation in the fit of expected utility predictions of international conflict to actual international conflict. Tests of the msot sophisticated general implementation of rational choice theory to international conflict (based on Bueno de Mesquita and Lalman's 1992 'international interaction game') reveal systematic variations in the fit of the predictions of the theory across time and space. This unexpected variation in the fit of the so-called 'expected utility theory of war' is not predicted by the theory, and it has importance implications for the application of rational choice models to international relations, to the study of international conflict, and to quantitative analysis in international relations. The systematic nature of the variation and its apparent fit to plausible hypotheses about learning and regional diffferences suggest that the variation is not solely the result of poor measurement or natural variation. As a result, these variations should be explained as a means of obtaining a more accurate and empirically applicable implementation of a key rational model of international conflict.

Variation in the fit of any rational choice model to interactions across time and space could be explained by at least two general approaches. First, some scholars would focus attention on the game structure, refusing to accept the premise that the international interaction game is an appropriate theoretical model of dyadic interaction for all dyads across time. Second, others would argue that measurement and application issues are the keys to testing and using expected utility theory in an applied setting, and that there are particular problems in the current measurement and operationalization of key expected utility concepts that have systematic distorting effects on tests of expected utility theory. Both of these possible problems have relevance in this particular case.

The principal investigator first plans to investigate how critical changes in the game structure of the international interaction game affect its predictions and the fit of those predictions to international conflict behavior. The investigator does this by focusing on the key game assumption that all states have the option to use force against one another, and also by developming a computer simulation intended to relax game assumptions sequentially and to reassess the fit of the resulting euilibria to global and regional behavior patterns. The investigator also examines critical measurement issues involved in the current operationalization and implementation of key expected utility concepts. In particular, close attention is given to the effects of distance and absolute state power as key determinants of why the predictions of the international interaction game do not fit as expected in broad empirical application. This work draws in part on insights gained during the development of EUGene (Expected Utility and Data Generation Program), the software package used to generate data to test fully the predictions of the international interaction game (Bennett and Stam 1997, 1998).