Conflict without Misperceptions or Incomplete Information

Abstract

Conflict and war are typically viewed as the outcome of misperceptions, incomplete information, or even irrationality. The authors show that it can be otherwise. Despite the short-run incentives to settle disputes peacefully, there can be long-term, compounding rewards to going to war when doing better relative to one's opponent today implies doing better tomorrow. Peaceful settlement involves not only sharing the pie available today but also foregoing the possibility, brought about by war, of gaining a permanent advantage over one's opponent into the future. The authors show how war emerges as an equilibrium outcome in a model that takes these considerations into account. War is more likely to occur, the more important is the future.