Ah, I see now that I did not make this clear at all. The main thing in the case of war is that, under certain payoff structures, a state might not be able to credibly commit to the terms of a peaceful settlement if it is expected to increase in power relative to its counterpart. Thus the state who expects to lose relative power will sometimes rather wage preventative war (while it is still relatively strong) than settle. This is still a problem in models with complete information and divisible stakes.
I’ll try to edit the text to make this clearer soon, thanks for bringing it up.
Ah, I see now that I did not make this clear at all. The main thing in the case of war is that, under certain payoff structures, a state might not be able to credibly commit to the terms of a peaceful settlement if it is expected to increase in power relative to its counterpart. Thus the state who expects to lose relative power will sometimes rather wage preventative war (while it is still relatively strong) than settle. This is still a problem in models with complete information and divisible stakes.
I’ll try to edit the text to make this clearer soon, thanks for bringing it up.