Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
957438 | Journal of Economic Theory | 2010 | 30 Pages |
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.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Pierre Yared,