In this article I remedy the popular misconception that the East Asian international system was hierarchical and non-egalitarian in history. I argue that the tribute system is mainly a function of power. Backed by power, Confucian norms and rules became the rules of the game in the system. Power asymmetry gave rise to hierarchy in foreign relations while power symmetry led to diplomatic equality between great powers. East Asia during the tenth to the thirteenth centuries was a multistate system without a regional hegemon. In the Song-Liao international system (960–1125), due to power symmetry, the two great powers conducted their foreign policy on the basis of formal equality. In the Song-Jin international system (1127–1234), the weaker Song China became a Jin vassal state and acknowledged its inferior status in the Jin-derived hierarchy. In studying historical East Asia, Confucian rhetoric needs to be examined against power reality. Only by taking power seriously can we get a better understanding of the East Asian international system.

International cooperation often requires costly policy adjustments. States may worry, however, that such adjustments weaken their outside options, and thus reduce their bargaining power. How does uncertainty about the effects of policy adjustments on outside options influence the depth of cooperation that states can achieve? My game-theoretic analysis shows that uncertainty about outside options is an obstacle to deep cooperation. If states agree on deep cooperation, they have to compensate vulnerable states with weak outside options for their losses. Under uncertainty, states that are not vulnerable have an incentive to falsely claim that they are vulnerable (i) to avoid a side payment or (ii) to obtain compensation for being vulnerable. The result holds even if the added value of deep cooperation would be large enough to fully compensate the losers. In equilibrium, the more vulnerable state sometimes offers a side payment to the less vulnerable one. More broadly, the analysis reveals a new international cooperation problem and provides a new rationale for costly signaling mechanisms and delegation to international organizations.