Weekly Seminar

Luis Corchón

Universidad Carlos III de Madrid

15-Apr-2013

Seminar 3 – 14:30

Abstract

We study the possibility of peace when two countries fight a war over the ownership of a resource. War is always the outcome of the game played by rational countries -under complete or asymmetric information- when there is no pre-established distribution of the resource among countries. When there is such a distribution of the resource, under complete information peace is feasible for some initial distributions of the resource, whereas under asymmetric information there are two classes of equilibria: Peaceful Equilibria, in which peace has a positive probability, and Aggressive Equilibria, which assign probability one to war. Surprisingly, a little asymmetric information may yield war.

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