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A theory of efficient coexistence

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Author Info
Shyh-fang Ueng
Abstract

Neighbours have to coexist over an infinite horizon. Neither of them can eradicate the other or extricate him or herself from the bondage. Their respective resources regenerate themselves periodically. Hence, the capacities for production and war repeatedly recuperate from exhaustion. This paper uses a simple dynamic model to study the cooperation and conflict between two neighbours. It is shown that the way for one party to enhance its own prosperity without inducing a war with its neighbour is to collaborate on mutually beneficial projects and divide the output according to each side's contribution. Rejecting potential collaboration or dividing the joint output disproportionately risks the eruption of war. If the duration that one side is prepared to fight exceeds that of the other, the one with a shorter duration will concede defeat before the war starts. Nonetheless, when the planned durations of war of both sides are identical, the first-strike advantage induces them to wage war simultaneously.

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Publisher Info
Article provided by Korean International Economic Association in its journal International Economic Journal.

Volume (Year): 19 (2005)
Issue (Month): 3 (September)
Pages: 397-416
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Handle: RePEc:taf:intecj:v:19:y:2005:i:3:p:397-416

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Related research
Keywords: Neighbours; collaboration; war; division of joint output;

References listed on IDEAS
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  4. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April. [Downloadable!] (restricted)
  5. Giuseppe Lopomo & Efe A Ok, 2001. "Bargaining, Interdependence and the Rationality of Fair Division," Levine's Working Paper Archive 563824000000000114, David K. Levine. [Downloadable!]
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  6. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April. [Downloadable!] (restricted)
  7. Fearon, James D, 1995. "Rationalist Explanations for War," International Organization, MIT Press, vol. 49(3), pages 379-414, Summer.
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