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Garfinkel, Michelle; Syropoulos, Constantinos
IDEAS Working Paper Series from RePEc, 01/2020Paper
On the basis of a single-period, guns-versus-butter, complete-information model in which two agents dispute control over an insecure portion of their combined output, we study the choice between a peace agreement that maintains the status quo without arming (or unarmed peace) and open conflict (or war) that is possibly destructive. With a focus on outcomes that are immune to both unilateral deviations and coalitional deviations, we find that, depending on war's destructive effects, the degree of output security and the initial distribution of resources, peace can, but need not necessarily, emerge in equilibrium. We also find that, while ex ante resource transfers without commitment can improve the prospects for peace, war remains the unique equilibrium in pure strategies when the initial distribution of resources is sufficiently uneven.
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