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Peace through bribing

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Listed:
  • Jingfeng Lu
  • Zongwei Lu
  • Christian Riis

Abstract

We study a model in which before a conflict between two parties escalates into a war (in the form of an all-pay auction), a party can offer a take-it-or-leave-it bribe to the other for a peaceful settlement. In contrast to the received literature, we find that peace security is impossible in our model. We characterize the necessary and sufficient conditions for peace implementability. Furthermore, we find that separating equilibria do not exist and the number of (on-path) bribes in any non-peaceful equilibria is at most two. We also consider a requesting model and characterize the necessary and sufficient conditions for the existence of robust peaceful equilibria, all of which are sustained by the identical (on-path) request. Contrary to the bribing model, peace security is possible in the requesting model.

Suggested Citation

  • Jingfeng Lu & Zongwei Lu & Christian Riis, 2021. "Peace through bribing," Papers 2107.11575, arXiv.org, revised Apr 2023.
    • Handle: RePEc:arx:papers:2107.11575
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    References listed on IDEAS

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    2. Olivier Compte & Philippe Jehiel, 2009. "Veto Constraint in Mechanism Design: Inefficiency with Correlated Types," American Economic Journal: Microeconomics, American Economic Association, vol. 1(1), pages 182-206, February.
    3. Lu, Jingfeng & Lu, Zongwei & Riis, Christian, 2021. "Perfect bidder collusion through bribe and request," Games and Economic Behavior, Elsevier, vol. 129(C), pages 1-14.
    4. Rachmilevitch, Shiran, 2013. "Bribing in first-price auctions," Games and Economic Behavior, Elsevier, vol. 77(1), pages 214-228.
    5. Rachmilevitch, Shiran, 2015. "Bribing in second-price auctions," Games and Economic Behavior, Elsevier, vol. 92(C), pages 191-205.
    6. Johannes Hörner & Nicolas Sahuguet, 2007. "Costly Signalling in Auctions -super-1," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(1), pages 173-206.
    7. Helmut Bester & Karl Wärneryd, 2006. "Conflict and the Social Contract," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(2), pages 231-249, July.
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