We consider social contracts for resolving conflicts between two agents who are uncertain about each other's fighting potential. Applications include international conflict, litigation and elections. Even though only a peaceful agreement avoids a loss of resources, if this loss is small enough, then any contract must assign a positive probability of conflict. We show how the likelihood of conflict outbreak depends on the distribution of power between the agents and their information about each other. Copyright The editors of the "Scandinavian Journal of Economics" 2006 .
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Paper
Helmut Bester & Karl Wärneryd, 2006.
"Conflict and the Social Contract,"
Discussion Papers
94, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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Balinga, Sandeep & Sjostrom, Tomas, 2001.
"Arms Races and Negotiations,"
Working Papers
3-01-2, Pennsylvania State University, Department of Economics.
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Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Michelle R. Garfinkel & Stergios Skaperdas, 2006.
"Economics of Conflict: An Overview,"
Working Papers
050623, University of California-Irvine, Department of Economics, revised Sep 2006.
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