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Modeling the forms of international cooperation: distribution versus information

Published online by Cambridge University Press:  22 May 2009

James D. Morrow
Affiliation:
Senior Research Fellow at the Hoover Institution, Stanford University, Stanford, California.
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Abstract

The problems of distribution and information impede international cooperation. They arise when actors select how they will cooperate. An exploration of the interaction between these problems using a limited information model of cooperation leads to six conclusions. First, leadership solutions to coordination problems always exist, but leadership here is very different from hegemonic provision of public goods. Second, actors can cooperate in the face of anarchy even without a shadow of the future. Third, diffuse reciprocal strategies arise naturally in coordination problems. Fourth, norms and institutions are intertwined within successful cooperation. Fifth, the form of cooperation on an issue varies with the relative importance of distribution and information. Finally and most important, distributional and informational problems interfere with each other. Arrangements to cooperate can successfully address one, but not both, of these problems.

Type
Research Article
Copyright
Copyright © The IO Foundation 1994

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References

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2. My distinction between sanctioning and monitoring on one hand and distribution and information on the other parallels Stein's distinction between collaboration and coordination. Sanctioning and monitoring are problems of collaboration, and distribution and information are problems of coordination. See Stein, Arthur A., Why Nations Cooperate: Circumstance and Choice in International Relations (Ithaca, N.Y.: Cornell University Press, 1990)Google Scholar. Lisa Martin adds problems of suasion and assurance to Stein's two problems in Interests, Power, and Multilateralism,” International Organization 46 (Autumn 1992), pp. 765–92CrossRefGoogle Scholar. The model here addresses both of Martin's problems. Suasion is a special case of coordination, and assurance is captured in the both-prefer games described below.

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18. Tit-for-tat is not a perfect equilibrium of the open-ended iterated prisoners' dilemma because it requires suboptimal behavior if one side defects; see Rasmusen, Eric, Games and Information (Cambridge: Basil Blackwell, 1989), p. 91Google Scholar. Actors are better off if they do not carry out the punishments dictated by tit-for-tat.

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22. I use the term “move” rather than “strategy” to describe each player's choice in a particular round. Strategies in game theory are complete plans to play the game. A strategy here specifies what moves should be played and what messages—if any—should be sent in any possible round. For an introduction to game theory, see Morrow, James D., Game Theory for Political Scientists (Princeton, N.J.: Princeton University Press, 1994)Google Scholar.

23. Alternatively, one can assume that the parties agree to a middle price halfway between the two prices if the buyer proposes a high price and the seller, a low price. This variation does not change the strategic logic of battle of the sexes. There are still two pure strategy equilibria, (A;A) and (B;B), and a symmetric mixed-strategy equilibrium. The probabilities of each move in the mixed-strategy equilibrium do change.

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25. Both-prefer games are also known as “stag hunt” or an assurance game; see Martin, “Interests, Power, and Multilateralism,” and Stein, Why Nations Cooperate.

26. The model is symmetric because all three games are symmetric. Both players have the same payoff for the three possible outcomes: more preferred coordination, less preferred coordination, and no coordination. This symmetry has no effect on the equilibria of the game, as I discuss later.

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28. The symmetry of equal chances of each game being played and each signal does not influence the set of equilibria for the model. Changing these probabilities alters the mixed strategies in each equilibrium.

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34. The model also has asymmetric equilibria without communication. In such an asymmetric equilibrium, the actors always coordinate on one move—A or B—leading to different expected payoffs. Because the game is symmetric, there is no a priori way to distinguish the players. Harsanyi and Selten argue that in the absence of any way to distinguish the players in a symmetric game, only symmetric equilibria are plausible; see Harsanyi, John C. and Selten, Reinhart, A General Theory of Equilibrium Selection in Games (Cambridge, Mass: MIT Press, 1988), pp. 7071Google Scholar. I ignore the asymmetric equilibria of the game. Without some mechanism to explain how the players share mutual expectations that they will always play one move, we cannot explain how the players can play an asymmetric equilibrium. I discuss later a regime with communication that produces asymmetric payoffs for the players.

35. For specifications of all equilibria and proofs, please see the appendix.

36. By assuming that messages honestly report information unless the players have incentives to dissemble, I follow Rabin's concept of “credible message” equilibrium; see Rabin, Matthew, “Communication Between Rational Agents,” Journal of Economic Theory 51 (06 1990), pp. 144–70CrossRefGoogle Scholar. There are equilibria that mirror those discussed in the text, i.e., wherein the messages mean the opposite of the observed signal. As Rabin cogently argues, agents agree on forms of communication that can be used to refine the set of equilibria of a game. Equilibrium behavior depends not only on the incentives of the game but also on forms of communication between the players.

37. The pure coordination equilibrium is also preferable to the dishonest communicative equilibrium whenp < a/(3a – 2), which is greater than (a – l)/(3a + 1). A later section discusses choosing among different possible equilibria.

38. There are other ways to send messages sequentially that have the same effect. For example, the first player's message indicates what move the players will coordinate on unless the second player objects to that move in its response. In all cases, the second message provides the cue that the players use to coordinate.

39. The self-enforcing feature of battle of the sexes contrasts with prisoners' dilemma, in which players always have a short-run incentive to defect. General reciprocal punishment strategies also produce behavior that looks like Keohane's diffuse reciprocity. See Bendor, “In Good Times and Bad,” and Downs and Rocke, Tacit Bargaining, Arms Races, and Arms Control.

40. Keohane, , “Reciprocity in International Relations,” pp. 2021Google Scholar.

41. In the leadership regime, there is no reciprocity for the follower. The follower does the leader's bidding because following the leader's directives is in its short-run interest. Still, the leadership equilibrium does produce an equal expected distribution of the total payoff when p > ½. This equality results because the follower denies the leader the information that the leader needs to exploit the follower.

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