Determinants of the Onset of Militarized Conflicts

Classical liberals such as Immanuel Kant have argued that expanding political participation and increasing economic interdependence would promote peace among states. The purpose of this paper is to use a game theoretical method to explore both pillars of the “liberal peace†hypothesis, one of the most frequently studied determinants of the onset of militarized conflicts. The paper focuses on two important contributions from related literature: Crescenzi's (2000) proposition that the linkage between economic interdependence and political conflict is unstable or more complex than the current theory of international bargaining suggests and Fearon's (1994) argument that relative audience costs (either domestic or international) matter in the international crisis situation (a political “war of attrition†). After revising Crescenzi's (2000) economic exit model using Fearon's (1994) audience cost argument, four different equilibriums in the international bargaining model emerged: the economic exit equilibrium, the constraint equilibrium, the bargaining power equilibrium, and the escalation equilibrium. This paper also provides seven examples of the bargaining game to demonstrate how these four equilibriums emerged.