Peace agreements without commitment
In this paper we present a model of war between two rational and completely informed players. We show that in the absence of binding agreements war can be avoided in many cases by one player transferring money to the other player. In most cases, the "rich" country transfers part of its money to the "poor" country. But when the military proficiency of the "rich" country is sufficiently high the "poor" country stops the war by transferring part of its resources to the "rich" country. War cannot be avoided by transfers when inequality of resources is very large or the cost of war is sufficiently low.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Richard Cornes & Roger Hartley, 2002.
"Asymmetric Contests with General Technologies,"
Keele Economics Research Papers
KERP 2002/22, Centre for Economic Research, Keele University.
- Nathan Nunn, 2007.
"The Long-Term Effects of Africa's Slave Trades,"
NBER Working Papers
13367, National Bureau of Economic Research, Inc.
- Christian Riis & Derek J. Clark, 1997. "Contest success functions: an extension," Economic Theory, Springer, vol. 11(1), pages 201-204.
- Garfinkel, Michelle R. & Skaperdas, Stergios, 2007.
"Economics of Conflict: An Overview,"
Handbook of Defense Economics,
- Aumann, R. J. & Peleg, B., 1974. "A note on Gale's example," Journal of Mathematical Economics, Elsevier, vol. 1(2), pages 209-211, August.
- Daron Acemoglu, 2002.
"Why Not a Political Coase Theorem? Social Conflict, Commitment and Politics,"
NBER Working Papers
9377, National Bureau of Economic Research, Inc.
- Acemoglu, Daron, 2003. "Why not a political Coase theorem? Social conflict, commitment, and politics," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 620-652, December.
- Alesina, Alberto & Spolaore, Enrico, 2005.
"War, peace, and the size of countries,"
Journal of Public Economics,
Elsevier, vol. 89(7), pages 1333-1354, July.
- Enrico Spolaore & Alberto Alesina, 2001. "War, Peace and the Size of Countries," Harvard Institute of Economic Research Working Papers 1937, Harvard - Institute of Economic Research.
- Spolaore, Enrico & Alesina, Alberto, 2005. "War, Peace, and the Size of Countries," Scholarly Articles 4553002, Harvard University Department of Economics.
- Matthew O. Jackson & Massimo Morelli, 2007.
"Political Bias and War,"
American Economic Review,
American Economic Association, vol. 97(4), pages 1353-1373, September.
- Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(03), pages 379-414, June.
- Perez-Castrillo, J David & Verdier, Thierry, 1992. " A General Analysis of Rent-Seeking Games," Public Choice, Springer, vol. 73(3), pages 335-50, April.
- van Damme,Eric, 1987.
"Stable equilibria and forward induction,"
Discussion Paper Serie A
128, University of Bonn, Germany.
- Skaperdas, S., 1991.
"Cooperation, Conflict And Power In The Absence Of Property Rights,"
90-91-06a, California Irvine - School of Social Sciences.
- Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-39, September.
- Piccione, Michele & Rubinstein, Ariel, 2004. "The curse of wealth and power," Journal of Economic Theory, Elsevier, vol. 117(1), pages 119-123, July.
- Rajan, Raghuram G. & Zingales, Luigi, 2000.
"The tyranny of inequality,"
Journal of Public Economics,
Elsevier, vol. 76(3), pages 521-558, June.
- Raghuram G. Rajan & Luigi Zingales, 1999. "The Tyranny of Inequality," CRSP working papers 423, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Raghuram G. Rajan & Luigi Zingales, 1995. "The Tyranny of Inequality," NBER Working Papers 5396, National Bureau of Economic Research, Inc.
- Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August.
- Skaperdas, Stergios, 1996.
"Contest Success Functions,"
Springer, vol. 7(2), pages 283-90, February.
- Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
- Michelle R Garfinkel & Stergios Skaperdas, 2001.
"Conflict Without Misperceptions or Incomplete Information: How the Future Matters,"
Levine's Working Paper Archive
563824000000000011, David K. Levine.
- Garfinkel, M.R. & Skaperdas, S., 2000. "Conflict without Misperceptions or Incomplete Information: how the Future Matters," Papers 99-00-11, California Irvine - School of Social Sciences.
- Jack Hirshleifer, 1991. "The Paradox Of Power," Economics and Politics, Wiley Blackwell, vol. 3(3), pages 177-200, November.
- Alastair Smith & Allan C. Stam, 2004. "Bargaining and the Nature of War," Journal of Conflict Resolution, Peace Science Society (International), vol. 48(6), pages 783-813, December.
- Santiago Sanchez-Pages, 2004.
"On the Social Efficiency of Conflict,"
ESE Discussion Papers
97, Edinburgh School of Economics, University of Edinburgh.
- Gallini, Nancy T, 1984. "Deterrence by Market Sharing: A Strategic Incentive for Licensing," American Economic Review, American Economic Association, vol. 74(5), pages 931-41, December.
When requesting a correction, please mention this item's handle: RePEc:eee:gamebe:v:68:y:2010:i:2:p:469-487. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.