I Won't Play Into Your Hands: A lab experiment of strategic interaction

Why do some countries choose to retaliate, while others back down? Motivated
by the strategic conflict avoidance with the IR literature, this paper models and
tests the strategic interaction during a bargaining between two collective actors.
When the target state believes that the initiator or the leader of the initiating state is domestically troubled, the target would accommodate the initiator's hostile demand in order not to be played in the initiator's hand. We design a lab experiment that captures the two-level nature of international crisis bargaining. We report the experimental evidence that decision-makers consider the domestic standing of the other decision maker as well as her own. The result confirms the strategic conflict avoidance that the reciprocating and retaliatory reaction becomes less popular as the responder's domestic standing improves, and that the conceding and forgiving behavior are more likely as the aggressor's domestic standing deteriorates.