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Conflict and the Social Contract

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  • Bester, Helmut
  • Wärneryd, Karl

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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Bibliographic Info

Paper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 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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Keywords: conflict; social contracts; asymmetric information;

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References

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  1. Skaperdas, S., 1991. "Cooperation, Conflict And Power In The Absence Of Property Rights," Papers, California Irvine - School of Social Sciences 90-91-06a, California Irvine - School of Social Sciences.
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  4. Mailath, George J & Postlewaite, Andrew, 1990. "Asymmetric Information Bargaining Problems with Many Agents," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 57(3), pages 351-67, July.
  5. Fieseler, Karsten & Kittsteiner, Thomas & Moldovanu, Benny, 2003. "Partnerships, lemons, and efficient trade," Journal of Economic Theory, Elsevier, Elsevier, vol. 113(2), pages 223-234, December.
  6. Sandeep Baliga & Tomas Sjostrom, 2001. "Arms Races and Negotiations," Levine's Working Paper Archive 391749000000000005, David K. Levine.
  7. Farrell, Joseph, 1987. "Information and the Coase Theorem," Journal of Economic Perspectives, American Economic Association, vol. 1(2), pages 113-29, Fall.
  8. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 103(6), pages 1275-88, December.
  9. Ausubel, Lawrence M. & Deneckere, Raymond J., 1989. "A direct mechanism characterization of sequential bargaining with one-sided incomplete information," Journal of Economic Theory, Elsevier, Elsevier, vol. 48(1), pages 18-46, June.
  10. Roger B. Myerson, 1977. "Incentive Compatability and the Bargaining Problem," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 284, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  11. John O. Ledyard & Thomas R. Palfrey, 1994. "Voting and Lottery Drafts as Efficient Public Goods Mechanisms," Game Theory and Information, EconWPA 9405003, EconWPA, revised 22 May 1994.
  12. Skaperdas, S. & Syropoulos, C., 1996. "Insecure Properties and the Stability of Exchange," Papers, California Irvine - School of Social Sciences 95-96-8, California Irvine - School of Social Sciences.
  13. Kathryn E. Spier, 1994. "Pretrial Bargaining and the Design of Fee-Shifting Rules," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 197-214, Summer.
  14. Klibanoff, Peter & Morduch, Jonathan, 1995. "Decentralization, Externalities, and Efficiency," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 62(2), pages 223-47, April.
  15. Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, Elsevier, vol. 87(2), pages 379-415, August.
  16. repec:fth:inseep:9629 is not listed on IDEAS
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Citations

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Cited by:
  1. Michelle R. Garfinkel & Stergios Skaperdas, 2006. "Economics of Conflict: An Overview," Working Papers 050623, University of California-Irvine, Department of Economics, revised Sep 2006.
  2. Stergios Skaperdas, 2007. "An Economic Approach to Analyzing Civil War," Working Papers 060715, University of California-Irvine, Department of Economics.
  3. Clara Ponsati & Santiago Sanchez-Pages, 2010. "Optimism and commitment: An elementary theory of bargaining and war," ESE Discussion Papers 198, Edinburgh School of Economics, University of Edinburgh.
  4. Tangerås, Thomas, 2008. "Democracy, Autocracy and the Likelihood of International Conflict," Working Paper Series, Research Institute of Industrial Economics 751, Research Institute of Industrial Economics.
  5. Stergios Skaperdas, 2006. "Bargaining Versus Fighting," Defence and Peace Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 17(6), pages 657-676.
  6. Vimal Kumar & Stergios Skaperdas, 2008. "On The Economics oF Organized Crime," Working Papers 070815, University of California-Irvine, Department of Economics.
  7. Santiago Sanchez-Pages, 2009. "Bargaining and Conflict with Incomplete Information," ESE Discussion Papers 191, Edinburgh School of Economics, University of Edinburgh.
  8. Tridimas, George, 2011. "The political economy of power-sharing," European Journal of Political Economy, Elsevier, vol. 27(2), pages 328-342, June.
  9. Mark Fey & Kristopher Ramsay, 2009. "Mechanism design goes to war: peaceful outcomes with interdependent and correlated types," Review of Economic Design, Springer, Springer, vol. 13(3), pages 233-250, September.
  10. Michael McBride & Stergios Skaperdas, 2009. "Conflict, Settlement, and the Shadow of the Future," Working Papers 080922, University of California-Irvine, Department of Economics.
  11. Libman, Alexander Mikhailovich, 2009. "Эндогенные Границы И Распределение Власти В Федерациях И Международных Сообществах
    [ENDOGENOUS BOUNDARIES AND DISTRIBUTION OF POWER In the Federation]
    ," MPRA Paper 16473, University Library of Munich, Germany.

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