40 research outputs found
Optimism and commitment: An elementary theory of bargaining and war
We propose an elementary theory of wars fought by fully rational contenders.
Two parties play a Markov game that combines stages of bargaining with stages
where one side has the ability to impose surrender on the other. Under uncertainty
and incomplete information, in the unique equilibrium of the game, long
confrontations occur: war arises when reality disappoints initial (rational) optimism,
and it persist longer when both agents are optimists but reality proves
both wrong. Bargaining proposals that are rejected initially might eventually
be accepted after several periods of confrontation. We provide an explicit computation
of the equilibrium, evaluating the probability of war, and its expected
losses as a function of i) the costs of confrontation, ii) the asymmetry of the
split imposed under surrender, and iii) the strengths of contenders at attack
and defense. Changes in these parameters display non-monotonic effects
Fortune Favours the Bold: An Agent-Based Model Reveals Adaptive Advantages of Overconfidence in War
Overconfidence has long been considered a cause of war. Like other decision-making biases, overconfidence seems detrimental because it increases the frequency and costs of fighting. However, evolutionary biologists have proposed that overconfidence may also confer adaptive advantages: increasing ambition, resolve, persistence, bluffing opponents, and winning net payoffs from risky opportunities despite occasional failures. We report the results of an agent-based model of inter-state conflict, which allows us to evaluate the performance of different strategies in competition with each other. Counter-intuitively, we find that overconfident states predominate in the population at the expense of unbiased or underconfident states. Overconfident states win because: (1) they are more likely to accumulate resources from frequent attempts at conquest; (2) they are more likely to gang up on weak states, forcing victims to split their defences; and (3) when the decision threshold for attacking requires an overwhelming asymmetry of power, unbiased and underconfident states shirk many conflicts they are actually likely to win. These “adaptive advantages” of overconfidence may, via selection effects, learning, or evolved psychology, have spread and become entrenched among modern states, organizations and decision-makers. This would help to explain the frequent association of overconfidence and war, even if it no longer brings benefits today
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The armed peace: A punctuated equilibrium theory of war
According to a leading rationalist explanation, war can break out when a large, rapid shift of power causes a credible commitment problem. This mechanism does not specify how inefficient fighting can resolve this cause, so it is an incomplete explanation of war. We present a complete information model of war as a sequence of battles and show that although opportunities for a negotiated settlement arise throughout, the very desirability of peace creates a commitment problem that undermines its likelihood. Because players have incentives to settle as soon as possible, they cannot credibly threaten to fight long enough if an opponent launches a surprise attack. This decreases the expected duration and costs of war and causes mutual deterrence to fail. Fighting's destructiveness improves the credibility of these threats by decreasing the benefits from continuing the war and can eventually lead to peace. In equilibrium players can only terminate war at specific windows of opportunity and fighting results in escalating costs that can leave both players worse off at the time peace is negotiated than a full concession would have before the war began. © 2007, Midwest Political Science Association
Is There a Strategic Interdependence Between the USA and Canada in the Tourism Sector? An Analysis Using Game Theory
On striking for a bargain between two completely informed agents
Bargaining, Negotiation, C72, C73, C78,