Corpus ID: 154829092

Bargaining and war: A review of some formal models

  title={Bargaining and war: A review of some formal models},
  author={Sandeep Baliga and Tomas Sj{\"o}str{\"o}m},
  journal={The Korean Economic Review},
Would perfectly rational agents always negotiate peaceful outcomes at the bargaining table, or would they sometimes fight costly wars? The Coase theorem suggests that when rational agents negotiate freely, they will reach a surplus-maximizing outcome. This seems to rule out war, since war will not in general be surplus-maximizing. However, the Coase theorem is valid only under certain assumptions, such as transferable utility (no restrictions on side-payments) and complete information. Brito… Expand
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