Give Peace a Chance: The Effect of Ownership and Asymmetric Information on Peace

35 Pages Posted: 3 Mar 2012 Last revised: 27 May 2013

See all articles by Luis C. Corchón

Luis C. Corchón

Universidad Carlos III de Madrid - Department of Economics

Anil Yildizparlak

Durham Business School

Date Written: February 15, 2012

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.

Keywords: peace, war, asymmetric information, contests, litigation

JEL Classification: C72, D74, D82

Suggested Citation

Corchón Diaz, Luis Carlos and Yildizparlak, Anil, Give Peace a Chance: The Effect of Ownership and Asymmetric Information on Peace (February 15, 2012). Journal of Economic Behavior and Organization, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2014732 or http://dx.doi.org/10.2139/ssrn.2014732

Luis Carlos Corchón Diaz

Universidad Carlos III de Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain

Anil Yildizparlak (Contact Author)

Durham Business School ( email )

Mill Hill Lane
Durham, Durham DH1 3LB
United Kingdom
01913347251 (Phone)
01913347251 (Fax)

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