Peace agreements without commitment

Carmen Beviá, Luis C. Corchón

Research output: Contribution to journalArticleResearchpeer-review

37 Citations (Scopus)

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 its money to the "poor" country. But when the military proficiency of the "rich" country is sufficiently high the "poor" country stops the war by transferring part of its resources to the "rich" country. War cannot be avoided by transfers when inequality of resources is very large or the cost of war is sufficiently low. © 2009 Elsevier Inc. All rights reserved.
Original languageEnglish
Pages (from-to)469-487
JournalGames and Economic Behavior
Volume68
DOIs
Publication statusPublished - 1 Mar 2010

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