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Long Wars

Author

Listed:
  • Tomas Sjostrom

    (Rutgers University
    Kellogg School of Management, Northwestern University)

Abstract

We study whether the Coase conjecture holds in a model of bargaining during conflict due to Powell and Fearon. Two players, A and B, contest a divisible resource. At any time during the conflict, they can make a binding agreement to share the resource. The conflict continues until they make an agreement or one side collapses. Player B privately knows w hether he is a strong or a weak type, with a greater probability of collapse if he is weak. The "lemons condition" says that player A would rather fight to the end than make a generous offer at the beginning of the conflict that both types of player B would accept. If this condition holds then the expected length of the conflict is bounded away from zero, even if negotiations are frictionless. Thus, the Coase conjecture does not hold. We study how the minimum length of conflict depends on the parameters, and the impact of third party intervention.

Suggested Citation

  • Tomas Sjostrom, 2023. "Long Wars," Departmental Working Papers 202301, Rutgers University, Department of Economics.
    • Handle: RePEc:rut:rutres:202301
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    File URL: http://www.sas.rutgers.edu/virtual/snde/wp/2023-01.pdf
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    References listed on IDEAS

    as
    1. Robert Evans, 1989. "Sequential Bargaining with Correlated Values," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(4), pages 499-510.
    2. Robert Powell, 2004. "Bargaining and Learning While Fighting," American Journal of Political Science, John Wiley & Sons, vol. 48(2), pages 344-361, April.
    3. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    4. Slantchev, Branislav L., 2003. "The Principle of Convergence in Wartime Negotiations," American Political Science Review, Cambridge University Press, vol. 97(4), pages 621-632, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Conflict; Bargaining;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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