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A dynamic theory of war and peace

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  • Yared, Pierre

Abstract

In every period, an aggressive country seeks concessions from a non-aggressive country with private information about their cost. The aggressive country can force concessions via war, and both countries suffer from limited commitment. We characterize the efficient sequential equilibria. We show that war is necessary to sustain peace and that temporary wars can emerge because of the coarseness of public information. In the long run, temporary wars can be sustained only if countries are patient, if the cost of war is large, and if the cost of concessions is low.

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  • Yared, Pierre, 2010. "A dynamic theory of war and peace," Journal of Economic Theory, Elsevier, vol. 145(5), pages 1921-1950, September.
  • Handle: RePEc:eee:jetheo:v:145:y:2010:i:5:p:1921-1950
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    References listed on IDEAS

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    Cited by:

    1. Enrico Spolaore & Romain Wacziarg, 2016. "War and Relatedness," The Review of Economics and Statistics, MIT Press, vol. 98(5), pages 925-939, December.
    2. Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2013. "War Signals: A Theory of Trade, Trust, and Conflict," Review of Economic Studies, Oxford University Press, vol. 80(3), pages 1114-1147.
    3. Petros G. Sekeris, 2014. "The tragedy of the commons in a violent world," RAND Journal of Economics, RAND Corporation, vol. 45(3), pages 521-532, September.
    4. Ariel Zetlin-Jones, "undated". "Efficient Financial Crises," GSIA Working Papers 2014-E19, Carnegie Mellon University, Tepper School of Business.
    5. Daron Acemoglu & Alexander Wolitzky, 2012. "Cycles of Distrust: An Economic Model," Levine's Working Paper Archive 786969000000000502, David K. Levine.
    6. Bilkic, Natasa & Gries, Thomas, 2012. "When to Attack an Oppressive Government?," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62031, Verein für Socialpolitik / German Economic Association.
    7. Roman, Mihai Daniel, 2010. "A game theoretic approach of war with financial influences," MPRA Paper 38389, University Library of Munich, Germany.
    8. Chan, Kenneth S. & Laffargue, Jean-Pierre, 2016. "Plunder and tribute in a Malthusian world," Mathematical Social Sciences, Elsevier, vol. 84(C), pages 138-150.
    9. Alessandro Dovis, 2013. "Efficient Sovereign Default," 2013 Meeting Papers 293, Society for Economic Dynamics.
    10. repec:spr:sochwe:v:49:y:2017:i:1:d:10.1007_s00355-017-1057-5 is not listed on IDEAS

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