Peace through bribing

TL;DR

This paper models pre-conflict bribing and requests as mechanisms to achieve peace, revealing conditions under which peace can or cannot be secured in these strategic settings.

Contribution

It introduces a novel analysis contrasting bribing and requesting models, characterizing equilibrium conditions for peace implementation and security.

Findings

Peace security is impossible in the bribing model.

No separating equilibria exist in the bribing model.

Peace security is achievable in the requesting model.

Abstract

We study a model in which before a conflict between two parties escalates into a war (in the form of an all-pay auction), a party can offer a take-it-or-leave-it bribe to the other for a peaceful settlement. In contrast to the received literature, we find that peace security is impossible in our model. We characterize the necessary and sufficient conditions for peace implementability. Furthermore, we find that separating equilibria do not exist and the number of (on-path) bribes in any non-peaceful equilibria is at most two. We also consider a requesting model and characterize the necessary and sufficient conditions for the existence of robust peaceful equilibria, all of which are sustained by the identical (on-path) request. Contrary to the bribing model, peace security is possible in the requesting model.