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Mutual Optimism and War

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  • Mark Fey
  • Kristopher W. Ramsay

Abstract

Working with the definition of mutual optimism as war due to inconsistent beliefs, we formalize the mutual optimism argument to test the theory's logical validity. We find that in the class of strategic situations where mutual optimism is a necessary condition for war—i.e., where war is known to be inefficient, war only occurs if both sides prefer it to a negotiated settlement, and on the eve of conflict war is self‐evident—then there is no Bayesian‐Nash equilibrium where wars are fought because of mutual optimism. The fundamental reason that mutual optimism cannot lead to war is that if both sides are willing to fight, each side should infer that they have either underestimated the strength of the opponent or overestimated their own strength. In either case, these inferences lead to a peaceful settlement of the dispute. We also show that this result extends to situations in which there is bounded rationality and/or noncommon priors.

Suggested Citation

  • Mark Fey & Kristopher W. Ramsay, 2007. "Mutual Optimism and War," American Journal of Political Science, John Wiley & Sons, vol. 51(4), pages 738-754, October.
    • Handle: RePEc:wly:amposc:v:51:y:2007:i:4:p:738-754
    DOI: 10.1111/j.1540-5907.2007.00278.x
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    References listed on IDEAS

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    1. Song Shin, H., 1989. "Non-Partitional Information On Dynamic State Spaces And The Possibility Of Speculation," Papers 90-01a, Michigan - Center for Research on Economic & Social Theory.
    2. Bahar Leventoğlu & Branislav L. Slantchev, 2007. "The Armed Peace: A Punctuated Equilibrium Theory of War," American Journal of Political Science, John Wiley & Sons, vol. 51(4), pages 755-771, October.
    3. John Geanakoplos, 1989. "Game Theory Without Partitions, and Applications to Speculation and Consensus," Cowles Foundation Discussion Papers 914, Cowles Foundation for Research in Economics, Yale University.
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    Cited by:

    1. Trebbi, Francesco & Weese, Eric & Wright, Austin L. & Shaver, Andrew, 2020. "Insurgent Learning," Journal of Political Institutions and Political Economy, now publishers, vol. 1(3), pages 417-448, August.
    2. Peter Bils & William Spaniel, 2017. "Policy bargaining and militarized conflict," Journal of Theoretical Politics, , vol. 29(4), pages 647-678, October.
    3. Phil Henrickson, 2020. "Predicting the costs of war," The Journal of Defense Modeling and Simulation, , vol. 17(3), pages 285-308, July.
    4. John Tyson Chatagnier, 2015. "Conflict bargaining as a signal to third parties," Journal of Theoretical Politics, , vol. 27(2), pages 237-268, April.
    5. Santiago Sanchez-Pages, 2009. "Bargaining and Conflict with Incomplete Information," Edinburgh School of Economics Discussion Paper Series 191, Edinburgh School of Economics, University of Edinburgh.
    6. Idean Salehyan, 2010. "The Delegation of War to Rebel Organizations," Journal of Conflict Resolution, Peace Science Society (International), vol. 54(3), pages 493-515, June.
    7. Aniruddha Bagchi & João Ricardo Faria & Timothy Mathews, 2019. "A model of a multilateral proxy war with spillovers," Public Choice, Springer, vol. 179(3), pages 229-248, June.
    8. Thomas Jensen & Andreas Madum, 2017. "Partisan optimism and political bargaining," Journal of Theoretical Politics, , vol. 29(2), pages 191-213, April.
    9. Edoardo Grillo & Antonio Nicolò, 2022. "Learning it the hard way: Conflicts, economic sanctions and military aids," "Marco Fanno" Working Papers 0284, Dipartimento di Scienze Economiche "Marco Fanno".
    10. Kristopher W. Ramsay, 2008. "Settling It on the Field," Journal of Conflict Resolution, Peace Science Society (International), vol. 52(6), pages 850-879, December.
    11. Li Duozhe & Wong Yat Fung, 2009. "Optimism and Bargaining Inefficiency," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-14, April.

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