Optimism and commitment: an elementary theory of bargaining and war
AbstractWe propose an elementary theory of wars fought by fully rational contenders. Two parties play a Markov game that combines stages of bargaining with stages where one side has the ability to impose surrender on the other. Under uncertainty and incomplete information, in the unique equilibrium of the game, long confrontations occur: war arises when reality disappoints initial (rational) optimism, and it persist longer when both agents are optimists but reality proves both wrong. Bargaining proposals that are rejected initially might eventually be accepted after several periods of confrontation. We provide an explicit computation of the equilibrium, evaluating the probability of war, and its expected losses as a function of i) the costs of confrontation, ii) the asymmetry of the split imposed under surrender, and iii) the strengths of contenders at attack and defense. Changes in these parameters display non-monotonic effects.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Spanish Economic Association in its journal SERIEs.
Volume (Year): 3 (2012)
Issue (Month): 1 (March)
Contact details of provider:
Postal: Universidad del País Vasco; DFAE II; Avenida Lehendakari Aguirre, 83; 48015 Bilbao; Spain
Phone: +34 94 6013783
Fax: + 34 94 6013774
Web page: http://www.springer.com/economics/journal/13209
More information through EDIRC
Other versions of this item:
- Ponsati, Clara & Sanchez-Pages, Santiago, 2010. "Optimism and commitment: An elementary theory of bargaining and war," SIRE Discussion Papers 2010-101, Scottish Institute for Research in Economics (SIRE).
- Clara Ponsati & Santiago Sanchez-Pages, 2010. "Optimism and commitment: An elementary theory of bargaining and war," ESE Discussion Papers 198, Edinburgh School of Economics, University of Edinburgh.
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
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.:
- Carmen Beviá & Luis C. Corchón, 2008.
"Peace Agreements Without Commitment,"
340, Barcelona Graduate School of Economics.
- Sanchez-Pages, Santiago, 2009.
"Bargaining and Conflict with Incomplete Information,"
SIRE Discussion Papers
2009-55, Scottish Institute for Research in Economics (SIRE).
- Santiago Sanchez-Pages, 2009. "Bargaining and Conflict with Incomplete Information," ESE Discussion Papers 191, Edinburgh School of Economics, University of Edinburgh.
- Powell, Robert, 1996. "Bargaining in the Shadow of Power," Games and Economic Behavior, Elsevier, vol. 15(2), pages 255-289, August.
- Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(03), pages 379-414, June.
- Bester, Helmut & Wärneryd, Karl, 2006.
"Conflict and the Social Contract,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
94, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Darren Filson & Suzanne Werner, . "A Bargaining Model of War and Peace: Anticipating the Onset, Duration, and Outcome of War," Claremont Colleges Working Papers 2001-02, Claremont Colleges.
- Jackson, Matthew O. & Morelli, Massimo, .
"Political bias and war,"
1247, California Institute of Technology, Division of the Humanities and Social Sciences.
- Santiago Sánchez-Pagés, 2009. "Conflict as a Part of the Bargaining Process," Economic Journal, Royal Economic Society, vol. 119(539), pages 1189-1207, 07.
- Powell, Robert, 2006. "War as a Commitment Problem," International Organization, Cambridge University Press, vol. 60(01), pages 169-203, January.
- Garfinkel, Michelle R. & Skaperdas, Stergios (ed.), 2012. "The Oxford Handbook of the Economics of Peace and Conflict," OUP Catalogue, Oxford University Press, number 9780195392777, Octomber.
- Merlo, Antonio & Wilson, Charles A, 1995. "A Stochastic Model of Sequential Bargaining with Complete Information," Econometrica, Econometric Society, vol. 63(2), pages 371-99, March.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:reading lists or Wikipedia pages:Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F Baum).
If references are entirely missing, you can add them using this form.