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Intimidation: Linking Negotiation and Conflict

Author

Listed:
  • Sambuddha Ghosh

    (Department of Economics, Boston university)

  • Gabriele Gratton

    (School of Economics, UNSW Business School, UNSW)

  • Caixia Shen

    (School of International Business Administration, Shanghai University of Finance and Economics)

Abstract

Challenger demands a resource from Defender. In each period, Challenger chooses whether to attack; if attacked, Defender chooses whether to concede the resource forever. Each player might be committed to fighting until victory. Before conflict begins, Defender can make finitely many offers; conflict begins if Challenger rejects all offers. In equilibrium, all offers except the last are unacceptable. Negotiation cannot eliminate conflict because a larger offer makes conflict increasingly attractive for Challenger. If negotiation fails, prolonged conflict can happen in equilibrium, even when uncertainty is vanishingly small. We provide comparative statics regarding the probability and length of conflict.

Suggested Citation

  • Sambuddha Ghosh & Gabriele Gratton & Caixia Shen, 2015. "Intimidation: Linking Negotiation and Conflict," Discussion Papers 2015-07, School of Economics, The University of New South Wales.
    • Handle: RePEc:swe:wpaper:2015-07
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    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2015-07.pdf
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    1. 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".

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    More about this item

    Keywords

    Intimidation; reputation; terrorism; negotiation; brinkmanship; costly war-of-attrition;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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