Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232455 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 8858
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
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, ex ante resource transfers without commitments can improve the prospects for peace, but only when the configuration of parameters describing the degree of output security and the degree of war’s destruction ensure the possibility of peace without such transfers at least for some sufficiently even initial resource distributions.
Subjects: 
disputes
output insecurity
destructive wars
peaceful settlement
unarmed peace
JEL: 
D30
D74
F51
Document Type: 
Working Paper
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