A brinkmanship crisis with two-sided incomplete information is modeled as a game of sequential bargaining in which each state is uncertain of its adversary's resolve. The sequential crisis equilibria are characterized explicitly and used to analyze the influences of resolve, misperception, and the status quo on escalation and crisis stability. The description of brinkmanship as a contest of resolve is found to be misleading: the state with the greatest resolve may not prevail in the crisis; a state may be less, not more, likely to prevail the greater its resolve; and a states' expected payoff may be less, not more, the greater its resolve. Moreover, reducing misperception may destabilize a crisis. Surprisingly, increasing the stake a potential challenger has in the status quo may not make a challenge less likely. Finally, crises involving severe conflicts of interest are shown to be less likely than crises not entailing a severe conflict of interest.
A direct mechanism characterization of sequential bargaining with one-sided incomplete information
