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In this paper, I outline a theory of how leaders can obtain reputations for madness in the eyes of foreign observers. I argue that the extent to which a leader’s actions will help to establish a madness reputation depends upon two factors: the costliness of the actions and the extent to which the actions appear to be intended to manipulate beliefs. Because higher costs can deter sane leaders from imitating madmen, more costly actions are more likely to be interpreted by observers as genuine evidence of madness. However, the level of costliness necessary to establish a madness reputation is much greater than the level of costliness necessary to establish a reputation for resolve. Moreover, even if an action is costly, the appearance that it is strategically intended to manipulate observer beliefs can lead to skepticism of a leader’s madness because madmen are not expected to be very strategic. Therefore, actions that appear to be taken spontaneously or in a situation in which the leader does not expect to be observed can raise estimates of madness to a greater extent. I test my theory with case studies of how adversaries viewed US President Richard Nixon and Soviet Premier Nikita Khrushchev.