On The Power to Hurt: Costly Conflict with Completely Informed States

Slantchev (2003, American Political Science Review, 97) studies a class of negotiation models to explain costly conflict between two completely informed nations. In one of his main propositions (Proposition 2.3), Slantchev provides a strategy profile to support the so-called extremal subgame perfect equilibrium, where one nation receives its lowest equilibrium payoff. By means of a counter example, we demonstrate the existence of an equilibrium with one nation's payoffs below the strategy profile provided in his Proposition 2.3 (Case 2).

Extreme Equilibria in a General Negotiation Model

We study a bargaining model with a disagreement game between o¤ers and countero¤ers. In order to characterize the set of its subgame perfect equilibrium payo¤s, we provide a recursive technique that relies on the Pareto frontier of equilibrium payo¤s. When players have di¤erent time preferences, reaching an immediate agreement may not be Pareto e ¢ cient. The recursive technique developed in this paper generalizes that of Shaked and Sutton (1984) by incorporating the possibility of making unacceptable proposals into the backward induction analysis. Results from this paper extend all the previous …ndings and resolve some open issues in the current literature

Antitrust enforcement with price-dependent fines and detection probabilities

We analyze the effectiveness of antitrust enforcement in repeated oligopoly models in which both fines and detection probabilities depend on the cartel price. Such fines reflect actual guidelines. Inspections based on monitoring of market prices imply endogenous detection probabilities. Without monitoring, fines that are either fixed or proportional to illegal gains cannot eradicate the monopoly price, but more-than-proportional fines can. Policy design with inspections based on price-monitoring implies that the profit-maximizing cartel price always lies below the monopoly price independently of the fine structure. These results offer partial support for the current practice of monitoring and more-than-proportional fines.Repeated game, Cartel, Oligopoly, Antitrust enforcement, Competition policy

Saving the Mekong River Basin

The Mekong River (MR) is shared by six countries: China, Myanmar, Thailand, Laos, Cambodia, and Vietnam. Over the years there have been both conflict and cooperation on managing the water resources to meet population growth, climate change and the desire for economic development. Currently, the MR Committee (MRC) has weak policy instruments. This paper exploits an axiomatic bargaining approach to examine how China and the MRC might negotiate effective joint management. We investigate what welfare improvements arise from strengthening the MRC and propose an alternative offering for the MR's joint management that is preferable to the status quo from the perspective of all nations. We show that there are little gains from cooperation unless international institutions provide a budget to promote cooperation with China. Alternatively, strengthening the MR Committee has the potential to achieve large welfare improvements

Saving the Mekong River Basin

The Mekong River (MR) is shared by six countries: China, Myanmar, Thailand, Laos, Cambodia, and Vietnam. Over the years there have been both conflict and cooperation on managing the water resources to meet population growth, climate change and the desire for economic development. Currently, the MR Committee (MRC) has weak policy instruments. This paper exploits an axiomatic bargaining approach to examine how China and the MRC might negotiate effective joint management. We investigate what welfare improvements arise from strengthening the MRC and propose an alternative offering for the MR's joint management that is preferable to the status quo from the perspective of all nations. We show that there are little gains from cooperation unless international institutions provide a budget to promote cooperation with China. Alternatively, strengthening the MR Committee has the potential to achieve large welfare improvements