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The Social Benefit of War

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Author Info
Hoffmann, Magnus

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Abstract

Recent findings in economic theory show that cooperation (settlement) between two identical players with conflicting interests in a valuable and contestable resource always Pareto dominates violent dispute (war), given that cooperation is presented using a symmetric bargaining norm. Necessary conditions for settlement to arise are the destructibility of war, and the costless and exogenous enforcement of any agreement made by the two players. We show that endogenous enforcement of the agreements alters the incentives of the players to bargain. This causes a shift in the Pareto frontier so that - under certain conditions - war Pareto dominates settlement.

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File URL: http://mpra.ub.uni-muenchen.de/6196/
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 6196.

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Date of creation: Oct 2007
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Handle: RePEc:pra:mprapa:6196

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Related research
Keywords: contests property rights endogenous enforcement bargaining

Find related papers by JEL classification:
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
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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