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Conflict and the Social Contract

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Author Info
Helmut Bester (Department of Economics, Free University of Berlin, Boltzmannstr. 20, D-14195 Berlin, Germany. HBester@wiwiss.fu-berlin.de)
Karl Wärneryd (Department of Economics, Stockholm School of Economics, Box 6501, S-113 83 Stockholm, Sweden. Karl.Warneryd@hhs.se)

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Abstract

We consider social contracts for resolving conflicts between two agents who are uncertain about each other's fighting potential. Applications include international conflict, litigation, and elections. Even though only a peaceful agreement avoids a loss of resources, if this loss is small enough, then any contract must assign a positive probability of conflict. We show how the likelihood of conflict outbreak depends on the distribution of power between the agents and their information about each other.

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Publisher Info
Paper provided by SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Papers with number 94.

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Date of creation: Feb 2006
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Handle: RePEc:trf:wpaper:94

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Related research
Keywords: conflict; social contracts; asymmetric information;

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Find related papers by JEL classification:
C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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References listed on IDEAS
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    Other versions:
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Stergios Skaperdas, 2006. "Bargaining Versus Fighting," Defence and Peace Economics, Taylor and Francis Journals, vol. 17(6), pages 657-676, December. [Downloadable!] (restricted)
    Other versions:
  2. Mark Fey & Kristopher Ramsay, 2009. "Mechanism design goes to war: peaceful outcomes with interdependent and correlated types," Review of Economic Design, Springer, vol. 13(3), pages 233-250, September. [Downloadable!] (restricted)
  3. Michael McBride & Stergios Skaperdas, 2009. "Conflict, Settlement, and the Shadow of the Future," Working Papers 080922, University of California-Irvine, Department of Economics. [Downloadable!]
  4. Michelle R. Garfinkel & Stergios Skaperdas, 2006. "Economics of Conflict: An Overview," Working Papers 050623, University of California-Irvine, Department of Economics, revised Sep 2006. [Downloadable!]
    Other versions:
  5. Thomas Tangerås, 2009. "Democracy, autocracy and the likelihood of international conflict," Economics of Governance, Springer, vol. 10(2), pages 99-117, April. [Downloadable!] (restricted)
  6. Stergios Skaperdas, 2007. "An Economic Approach to Analyzing Civil War," Working Papers 060715, University of California-Irvine, Department of Economics. [Downloadable!]
    Other versions:
  7. Vimal Kumar & Stergios Skaperdas, 2008. "On The Economics oF Organized Crime," Working Papers 070815, University of California-Irvine, Department of Economics. [Downloadable!]
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