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Uncertainty in conflicts

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  • Juan David Prada-Sarmiento

Abstract

This paper theoretically assesses the role that uncertainty plays in the intensity of conflicts. The standard two-player rent-seeking contest model (Tullock, 1980) is extended to allow for privately known subjective values of the prize. The conflict is modeled as a Bayesian game on which each player´s valuation is drawn independently from arbitrary distributions. We find sufficient conditions for when first-order and second-order stochastic refinements in the distributions cause predictable movements in the conflict´s dissipation. We focus on arbitrary contest success functions and arbitrary independent distributions for each player, allowing us to extend our analysis beyond the case of symmetric equilibria.

Suggested Citation

  • Juan David Prada-Sarmiento, 2010. "Uncertainty in conflicts," Documentos CEDE 7713, Universidad de los Andes, Facultad de Economía, CEDE.
    • Handle: RePEc:col:000089:007713
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    File URL: https://repositorio.uniandes.edu.co/bitstream/handle/1992/8207/dcede2010-29.pdf
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    References listed on IDEAS

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    1. Daniel Mejía & Pascual Restrepo, 2008. "The War on Illegal Drug Production and Trafficking: An Economic Evaluation of Plan Colombia," Documentos CEDE 005123, Universidad de los Andes - CEDE.
    2. Xavier Sala-i-Martin, 2002. "The World Distribution of Income (estimated from Individual Country Distributions)," NBER Working Papers 8933, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Thomas Giebe & Paul Schweinzer, 2012. "Fuzzy Price-Quality Ratio Procurement under Incomplete Information," Discussion Papers 12/26, Department of Economics, University of York.
    2. Thomas Giebe & Paul Schweinzer, 2015. "Probabilistic procurement auctions," Review of Economic Design, Springer;Society for Economic Design, vol. 19(1), pages 25-46, March.

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    Keywords

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    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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