The Strategy of Conflict and the Technology of War

Bantwal Sandeep Baliga, Tomas Sjöström

Research output: Working paper

Abstract

We consider a simple bargaining model where conflict occurs if the players cannot agree to share a resource peacefully. Each player can decide to challenge the status quo. A challenge is a strategic move: the challenger commits to start a conflict unless the opponent concedes some part of his endowment. Uncertainty about the opponent's cost of making a challenge generates a unique equilibrium. Increasing the cost of conflict makes the players more hawkish, because challenges become more profitable: the opponent will make larger concessions to avoid a conflict. Actions are strategic substitutes if the cost of conflict is large or if there is a small first-mover advantage, and strategic complements if the cost of conflict is small and there is a large first-mover advantage. We also study the incentives to make strategic investments ex ante to influence the cost of conflict or the payoff to resources.
Original languageEnglish (US)
Number of pages29
StatePublished - Sep 15 2015

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