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Conflict and the Social Contract

  • Helmut Bester
  • Karl Wärneryd

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. Copyright The editors of the "Scandinavian Journal of Economics" 2006 .

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Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 108 (2006)
Issue (Month): 2 (07)
Pages: 231-249

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Handle: RePEc:bla:scandj:v:108:y:2006:i:2:p:231-249
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