The Slippery Slope of Concession
نویسندگان
چکیده
We show that with common knowledge and a common rate of time preference, the potential loser can always avoid wasteful conflict through a time-consistent series of small concessions. We examine how the failure of each of these assumptions may explain why conflicts arise. We also debate which actions may be helpful in such unfortunate circumstances. 1 We would like to thank NSF Grants SES-03-14713 and SES-01-0114147 for financial support. 2 Hirshleifer: Department of Economics, UCLA; Boldrin and Levine Department of Economics, Washington University in St. Louis. The original draft of this paper together with the substantive results was prepared by all three authors. The current draft was prepared after Jack’s death on July 26, 2005, and we took the liberty of highlighting Jack’s earlier contributions to this literature.
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