Article

Bargaining and Conflict with Incomplete Information

Santiago Sanchez-Pages

in The Oxford Handbook of the Economics of Peace and Conflict

Published in print April 2012 | ISBN: 9780195392777
Published online November 2012 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780195392777.013.0004

Series: Oxford Handbooks

Bargaining and Conflict with Incomplete Information

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This article considers the strategic transmission of information, though in a variety of ways, including not only costly signaling through actions to convey information, but also engaging in limited war as a means to learn about the opponent's strength. It provides a useful review of the mechanism design approach to the problem. The article implies that conflict and inefficiencies are to be expected whenever parties have optimistic prospects on the outcome of the all-out conflict. It also examines the recent literature that has challenged this view. These new contributions consider the existence of limited confrontations that allow bargaining to resume. In the presence of private information on the balance of strengths, that means that conflict can convey information and potentially become a bargaining instrument.

Keywords: strategic transmission; information transmission; bargaining; conflict negotiation

Article.  14744 words. 

Subjects: Economics ; Economic Development and Growth ; Econometric and Statistical Methods and Methodology: General

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