ABSTRACT
Thus far, we have assumed that any uncertainty we choose to incorporate into our models has nature as its source. More importantly, if nature’s moves are revealed to one person, we have thus far assumed that they are revealed to everyone, so that there are no informational asymmetries-no one has any private information, aside, possibly, from the choices they make as the situation unfolds. More generally, though, many important political processes can be modeled only if we assume that decision makers have private information, such as the details of their own preferences or their capabilities. A great many examples and subsidiary questions come to mind:
What costs are terrorists willing to incur after hijacking a plane, and how willing should a government be to make concessions or to risk sacrificing hostages?
