Measuring Uncertainty in International Relations: Heteroskedastic Strategic Models

Research output: Contribution to journalArticle

Abstract

Actor-level variations in the amounts of uncertainty have been widely ignored in the growing literature on statistical models of strategic interaction in international relations. In this article, I provide a tool for testing theories about the level of uncertainty in strategic interactions. I show that ignoring potential variations in levels of uncertainty across different cases can be a source of bias for empirical analyses. I propose a method to incorporate this form of heteroskedasticity into existing estimators and show that this method can improve inferences. With a series of Monte Carlo experiments, I evaluate the magnitude and the severity of the bias and inconsistency in estimators that ignore heteroskedasticity. More importantly, the tools developed in this article have many interesting substantive application areas. Examples considered include measuring speculators' suboptimal behavior tendencies in international currency crises, and capturing varying levels of signaling and Bayesian updating behavior in the recent strategic models of signaling.

Original languageEnglish (US)
Pages (from-to)490-520
Number of pages31
JournalConflict Management and Peace Science
Volume29
Issue number5
DOIs
StatePublished - Nov 1 2012

Fingerprint

international relations
uncertainty
trend
interaction
currency
experiment
Uncertainty
International relations
Strategic interaction
Estimator
Heteroskedasticity
literature
Bayesian updating
Severity
Speculators
Inference
Statistical model
International currency
Monte Carlo experiment
Currency crises

Keywords

  • bounded rationality
  • heteroskedasticity
  • private information
  • strategic interaction
  • uncertainty in IR

ASJC Scopus subject areas

  • Economics and Econometrics
  • Political Science and International Relations

Cite this

Measuring Uncertainty in International Relations : Heteroskedastic Strategic Models. / Bas, Muhammet.

In: Conflict Management and Peace Science, Vol. 29, No. 5, 01.11.2012, p. 490-520.

Research output: Contribution to journalArticle

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