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Peace agreements without commitment

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Abstract

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 her money to the "poor" country. Only when the military proficiency of the "rich" country is sufficiently great, it could be that the "poor" country can stop the war by transfering part of its resources to the "rich" country.

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  • Beviá, Carmen, 2008. "Peace agreements without commitment," UC3M Working papers. Economics we081508, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:we081508
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    1. Michelle R. Garfinkel & Constantinos Syropoulos, 2019. "Problems of commitment in arming and war: how insecurity and destruction matter," Public Choice, Springer, vol. 178(3), pages 349-369, March.
    2. Dominic Rohner, 2018. "Success Factors for Peace Treaties: A Review of Theory and Evidence," Cahiers de Recherches Economiques du Département d'économie 18.08, Université de Lausanne, Faculté des HEC, Département d’économie.
    3. Changxia Ke & Kai A. Konrad & Florian Morath, 2015. "Alliances In The Shadow Of Conflict," Economic Inquiry, Western Economic Association International, vol. 53(2), pages 854-871, April.
    4. Clara Ponsati & Santiago Sanchez-Pages, 2012. "Optimism and commitment: an elementary theory of bargaining and war," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 3(1), pages 157-179, March.
    5. Chan, Kenneth S. & Laffargue, Jean-Pierre, 2016. "Plunder and tribute in a Malthusian world," Mathematical Social Sciences, Elsevier, vol. 84(C), pages 138-150.
    6. Hoffmann, Magnus & Rota-Graziosi, Grégoire, 2012. "Endogenous timing in general rent-seeking and conflict models," Games and Economic Behavior, Elsevier, vol. 75(1), pages 168-184.
    7. Giacomo Battiston & Matteo Bizzarri & Riccardo Franceschin, 2021. "Third-Party Interest, Resource Value, and the Likelihood of Conflict," CSEF Working Papers 631, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 20 Jun 2022.
    8. Schaller, Zachary & Skaperdas, Stergios, 2020. "Bargaining and conflict with up-front investments: How power asymmetries matter," Journal of Economic Behavior & Organization, Elsevier, vol. 176(C), pages 212-225.
    9. Cubel Maria & Sanchez-Pages Santiago, 2012. "The effect of within-group inequality in a conflict against a unitary threat," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 18(3), pages 1-11, December.
    10. van der Ploeg, Frederick & Rohner, Dominic, 2012. "War and natural resource exploitation," European Economic Review, Elsevier, vol. 56(8), pages 1714-1729.
    11. Libman, Alexander Mikhailovich, 2009. "Эндогенные Границы И Распределение Власти В Федерациях И Международных Сообществах [ENDOGENOUS BOUNDARIES AND DISTRIBUTION OF POWER In the Federation]," MPRA Paper 16473, University Library of Munich, Germany.
    12. Corchón, Luis C. & Yıldızparlak, Anıl, 2013. "Give peace a chance: The effect of ownership and asymmetric information on peace," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 116-126.
    13. Matthew O. Jackson & Massimo Morelli, 2011. "The Reasons for Wars: An Updated Survey," Chapters, in: Christopher J. Coyne & Rachel L. Mathers (ed.), The Handbook on the Political Economy of War, chapter 3, Edward Elgar Publishing.
    14. Kimbrough, Erik O. & Sheremeta, Roman M. & Shields, Timothy W., 2014. "When parity promotes peace: Resolving conflict between asymmetric agents," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 96-108.
    15. Kimbrough, Erik O. & Laughren, Kevin & Sheremeta, Roman, 2020. "War and conflict in economics: Theories, applications, and recent trends," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 998-1013.
    16. Aniruddha Bagchi & João Ricardo Faria & Timothy Mathews, 2019. "A model of a multilateral proxy war with spillovers," Public Choice, Springer, vol. 179(3), pages 229-248, June.
    17. Pelosse, Yohan, 2011. "Inter and intra-group conflicts as a foundation for contest success functions," MPRA Paper 31468, University Library of Munich, Germany.
    18. Bharat Goel & Arijit Sen, 2019. "Appropriative Conflicts and the Evolution of Property Rights," Working Papers tax-mpg-rps-2019-06, Max Planck Institute for Tax Law and Public Finance.
    19. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    20. repec:cte:werepe:we1114 is not listed on IDEAS
    21. Gvozdeva, Margarita (Гвоздева, Маргарита) & Kazakova, M.V. (Казакова, М.В.) & Kiblitskaya, T.R. (Киблицкая, Т.Р.) & Lyubimov, I.L. (Любимов, И.Л.) & Nesterova, K.V. (Нестерова, К.В.), 2016. "Various Aspects of Natural Resource Wealth Effect on Economic Growth [Различные Аспекты Влияния Богатства Природными Ресурсами На Экономический Рост]," Working Papers 2045, Russian Presidential Academy of National Economy and Public Administration.
    22. Vahabi,Mehrdad, 2019. "The Political Economy of Predation," Cambridge Books, Cambridge University Press, number 9781107591370.
    23. Anil Yildizparlak, 2018. "An Application of Contest Success Functions for Draws on European Soccer," Journal of Sports Economics, , vol. 19(8), pages 1191-1212, December.
    24. Antonis Adam & Petros G. Sekeris, 2010. "Self-Containment: Achieving Peace in Anarchic Settings," Working Papers 1014, University of Namur, Department of Economics.

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