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Peace agreements without commitment

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Author Info
Carmen Bevia
Luis C. Corchon ()

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Abstract

In this paper we present a model of war between two rational and completely informed players. We show that in the absence of binding agreements war can be avoided in many cases by one player transferring money to the other player. In most cases, the "rich" country transfers part of her money to the "poor" country. Only when the military proficiency of the "rich" country is sufficiently great, it could be that the "poor" country can stop the war by transfering part of its resources to the "rich" country.

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File URL: http://e-archivo.uc3m.es/dspace/bitstream/10016/2354/1/we081508.pdf
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Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we081508.

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Date of creation: Mar 2008
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Handle: RePEc:cte:werepe:we081508

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  1. Skaperdas, Stergios, 1996. "Contest Success Functions," Economic Theory, Springer, vol. 7(2), pages 283-90, February.
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  2. van Damme, Eric, 1989. "Stable equilibria and forward induction," Journal of Economic Theory, Elsevier, vol. 48(2), pages 476-496, August. [Downloadable!] (restricted)
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  3. Alesina, Alberto & Spolaore, Enrico, 2005. "War, peace, and the size of countries," Journal of Public Economics, Elsevier, vol. 89(7), pages 1333-1354, July. [Downloadable!] (restricted)
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  4. Richard Cornes & Roger Hartley, 2002. "Asymmetric Contests with General Technologies," Keele Economics Research Papers KERP 2002/22, Centre for Economic Research, Keele University. [Downloadable!]
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  5. Matthew O. Jackson & Massimo Morelli, 2007. "Political Bias and War," American Economic Review, American Economic Association, vol. 97(4), pages 1353-1373, September. [Downloadable!]
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    • Jackson, Matthew O. & Morelli, Massimo, . "Political bias and war," Working Papers 1247, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
  6. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-39, September. [Downloadable!] (restricted)
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  7. Nathan Nunn, 2008. "The Long-Term Effects of Africa's Slave Trades," The Quarterly Journal of Economics, MIT Press, vol. 123(1), pages 139-176, 02. [Downloadable!] (restricted)
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  8. Fearon, James D, 1995. "Rationalist Explanations for War," International Organization, MIT Press, vol. 49(3), pages 379-414, Summer.
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  9. Aumann, R. J. & Peleg, B., 1974. "A note on Gale's example," Journal of Mathematical Economics, Elsevier, vol. 1(2), pages 209-211, August. [Downloadable!] (restricted)
  10. Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August. [Downloadable!] (restricted)
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