Behavioral issues of rationality in international interaction - An international appraisal

The behavioral pointers of rationality discussed by Langlois and Langlois a re used to scan the World Events Interaction Survey data on U.S.-China and U.S.-Soviet relations for evidence of rational behavior in the interaction between states. The null hypothesis that the interaction between states is not compatible with subgame perfect equilibrium play in all cases examined is rejected: states react to each other's past moves; if deviations hom equ ilibrium play are significant in explaining player moves, they determine po sitive inducement effects; and implied payoff structures reveal a need for strategic management of the relationship. With payoff structures estimated to be prisoner's dilemmas for all players, both bilateral relations begin w ith the widest tolerance of the other's behavioral choice and the adoption of countervailing strategies. Over time, these nations' strategic interacti on evolves toward a sharpening of the bounds they envision for their relati onships.