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¡Ú¥¿¥¤¥È¥ë¡ÛDetecting Audience Costs in International Disputes
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¡¡Determining the existence and size of audience costs is critical for
understand- ing their causal effects and behavioral implications, but
also challenging because strategic selection bias can truncate their
observable distribution. We use strategic structural estimation to
obtain direct evidence of audience costs with observational data on
international crises. In our estimation, when a state makes a threat
and then backs down, the state incurs a negative payoff, strictly less
than the payoff it would have obtained had it not threatened. This
payoff difference, which defines audience costs, is shown to exist for
any regime type. We also show that democratic leaders incur greater
audience costs than do autocrats. Further, by estimating the amount of
belief updating that occurs, we present the first evidence that
audience costs improve the ability of countries to signal their
intentions and hence facilitate communication through threats. These
results establish an empirical foundation for the audience costs proposition.

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