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A theory of efficient coexistence

  • Shyh-fang Ueng
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    Neighbours have to coexist over an infinite horizon. Neither of them can eradicate the other or extricate him or herself from the bondage. Their respective resources regenerate themselves periodically. Hence, the capacities for production and war repeatedly recuperate from exhaustion. This paper uses a simple dynamic model to study the cooperation and conflict between two neighbours. It is shown that the way for one party to enhance its own prosperity without inducing a war with its neighbour is to collaborate on mutually beneficial projects and divide the output according to each side's contribution. Rejecting potential collaboration or dividing the joint output disproportionately risks the eruption of war. If the duration that one side is prepared to fight exceeds that of the other, the one with a shorter duration will concede defeat before the war starts. Nonetheless, when the planned durations of war of both sides are identical, the first-strike advantage induces them to wage war simultaneously.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500199574
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    Article provided by Taylor & Francis Journals in its journal International Economic Journal.

    Volume (Year): 19 (2005)
    Issue (Month): 3 ()
    Pages: 397-416

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    Handle: RePEc:taf:intecj:v:19:y:2005:i:3:p:397-416
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    1. Balinga, Sandeep & Sjostrom, Tomas, 2001. "Arms Races and Negotiations," Working Papers 3-01-2, Pennsylvania State University, Department of Economics.
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    8. A. Muthoo, 2002. "A Model of the Origins of Basic Property Rights," Economics Discussion Papers 546, University of Essex, Department of Economics.
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