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Bargaining Failure and the Logic of War and Conflict: Rational Escalation by Far Sighted and Well Informed Rivals

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Abstract:

We develop a model of war and bargaining between fully informed rivals that allows for a bargaining process to develop over time in the shadow of possible warfare. We find that costly wars may occur in equilibrium because the rivals fail to agree on the terms of a peaceful bargain. When faced with a challenge, the defender is indifferent between a range of offers, each being associated with the challenger's probabilistic threat of escalation. The higher the defender's counteroffer the lower the risk of war, but the rivals cannot identify settlements that are strictly preferred to war ex ante. However, we distinguish between the ex ante expected utility calculations on which the rivals make forward looking, optimal, decisions and the evaluation of the ex post consequences of these choices. The ex post evaluation captures the long run consequence of engaging in conflict by measuring the expected net outcome of the crisis. In those equilibrium strategies that also optimize expected prospects ex post, the defender makes low compromise offers in case of challenge despite a positive probability of war, while the challenger either challenges aggressively for 100 percent of the contested asset, or forgoes challenge altogether if his/her war costs are too large.
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Most Common Document Word Stems:

c (183), challeng (157), war (153), defend (102), ex (96), offer (75), 1 (72), cost (65), expect (65), b (61), demand (60), 9 (60), bargain (57), post (56), rival (53), equilibrium (52), accept (43), ant (41), conflict (41), escal (39), state (37),

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Keywords: conflict processes, bargaining, war, game theory, perfect information, escalation, perfect equilibrium
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MLA Citation:

Langlois, Jean-Pierre. and Langlois, Catherine. "Bargaining Failure and the Logic of War and Conflict: Rational Escalation by Far Sighted and Well Informed Rivals" Paper presented at the annual meeting of the American Political Science Association, Boston Marriott Copley Place, Sheraton Boston & Hynes Convention Center, Boston, Massachusetts, Aug 28, 2002 <Not Available>. 2009-05-27 <http://www.allacademic.com/meta/p65702_index.html>

APA Citation:

Langlois, J. and Langlois, C. , 2002-08-28 "Bargaining Failure and the Logic of War and Conflict: Rational Escalation by Far Sighted and Well Informed Rivals" Paper presented at the annual meeting of the American Political Science Association, Boston Marriott Copley Place, Sheraton Boston & Hynes Convention Center, Boston, Massachusetts Online <.PDF>. 2009-05-27 from http://www.allacademic.com/meta/p65702_index.html

Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
Abstract: We develop a model of war and bargaining between fully informed rivals that allows for a bargaining process to develop over time in the shadow of possible warfare. We find that costly wars may occur in equilibrium because the rivals fail to agree on the terms of a peaceful bargain. When faced with a challenge, the defender is indifferent between a range of offers, each being associated with the challenger's probabilistic threat of escalation. The higher the defender's counteroffer the lower the risk of war, but the rivals cannot identify settlements that are strictly preferred to war ex ante. However, we distinguish between the ex ante expected utility calculations on which the rivals make forward looking, optimal, decisions and the evaluation of the ex post consequences of these choices. The ex post evaluation captures the long run consequence of engaging in conflict by measuring the expected net outcome of the crisis. In those equilibrium strategies that also optimize expected prospects ex post, the defender makes low compromise offers in case of challenge despite a positive probability of war, while the challenger either challenges aggressively for 100 percent of the contested asset, or forgoes challenge altogether if his/her war costs are too large.
Check author's web site for an updated version of the paper.

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Document Type: .pdf
Page count: 32
Word count: 10979
Text sample:
1 Bargaining Failure and the Logic of War and Conflict: Rational Escalation by Far Sighted and Well Informed Rivals by Catherine C. Langlois Associate Professor i McDonough School of Business Georgetown University Langlois@msb.edu and Jean­Pierre P. Langlois Professor Department of Mathematics San Francisco State University Langlois@math.sfsu.edu August 15 2002 * The authors considering their contribution to be equal have listed their names alphabetically. 2 Bargaining Failure and the Logic of War and Conflict: Rational Escalation by Far Sighted and
: 5 > ~ $ = ~ $ ²# c $³< ²:³ b $= # # # c ²³ c ²³ # # # # # # # # 6 7 ~ ²# c $³$ < ²:³ b $ = c ²³ c ²³ # # # # # # # (a2) where is the remaining path starting from and . Observing further # # # # # 5 ² ³ ~ ² ³ c # that and summing


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