Optimism and commitment: an elementary theory of bargaining and war

@article{Ponsati2012OptimismAC,
  title={Optimism and commitment: an elementary theory of bargaining and war},
  author={Clara Ponsati and Santiago S{\'a}nchez-Pag{\'e}s},
  journal={SERIEs},
  year={2012},
  volume={3},
  pages={157-179}
}
We propose an elementary theory of wars fought by fully rational contenders that features three of the main rationalist explanations for armed conflicts: uncertainty, commitment, and indivisibility. Two parties play a Markov game that combines stages of bargaining, where offers are made, with claim stages, where one side can commit to impose surrender on the other. Under uncertainty on the persistence of claims, long confrontations occur in the unique equilibrium of the game: war arises when… 
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