Negative-sum conflicts happen due to factual disagreements (mostly inaccurate assessments of relative power), not value disagreements. If two parties have accurate beliefs but different values, bargaining will be more beneficial to both than making war, because bargaining can avoid destroying wealth but still take into account the “correct” counterfactual outcome of war.
Though bargaining may still look like “who whom” if one party is much more powerful than the other.
How strong perfect-information assumptions do you need to guarantee that rational decision-making can never lead both sides in a conflict to precommit to escalation, even in a situation where their behavior has signaling implications for other conflicts in the future? (I don’t know the answer to this question, but my hunch is that even if this is possible, the assumptions would have to be unrealistic for anything conceivable in reality.)
And of course, as you note, even if every conflict is resolved by perfect Coasian bargaining, if there is a significant asymmetry of power, the practical outcome can still be little different from defeat and subjugation (or even obliteration) in a war for the weaker side.
Negative-sum conflicts happen due to factual disagreements (mostly inaccurate assessments of relative power), not value disagreements.
By ‘negative-sum’ do you really mean ‘negative for all parties’? Because, taking ‘negative-sum’ literally, we can imagine a variant of the Prisoner’s Dilemma where A defecting gains 1 and costs B 2, and where B defecting gains 3 and costs A 10.
How does that make sense? You are correct that under sufficiently generous Coasian assumptions, any attempt at predation will be negotiated into a zero-sum transfer, thus avoiding a negative-sum conflict. But that is still a violation of Pareto optimality, which requires that nobody ends up worse off.
I don’t understand your comment. There can be many Pareto optimal outcomes. For example, “Alice gives Bob a million dollars” is Pareto optimal, even though it makes Alice worse off than the other Pareto optimal outcome where everyone keeps their money.
Yes, this was a confusion on my part. You are right that starting from a Pareto-optimal state, a pure transfer results in another Pareto-optimal state.
Negative-sum conflicts happen due to factual disagreements (mostly inaccurate assessments of relative power), not value disagreements. If two parties have accurate beliefs but different values, bargaining will be more beneficial to both than making war, because bargaining can avoid destroying wealth but still take into account the “correct” counterfactual outcome of war.
Though bargaining may still look like “who whom” if one party is much more powerful than the other.
How strong perfect-information assumptions do you need to guarantee that rational decision-making can never lead both sides in a conflict to precommit to escalation, even in a situation where their behavior has signaling implications for other conflicts in the future? (I don’t know the answer to this question, but my hunch is that even if this is possible, the assumptions would have to be unrealistic for anything conceivable in reality.)
And of course, as you note, even if every conflict is resolved by perfect Coasian bargaining, if there is a significant asymmetry of power, the practical outcome can still be little different from defeat and subjugation (or even obliteration) in a war for the weaker side.
By ‘negative-sum’ do you really mean ‘negative for all parties’? Because, taking ‘negative-sum’ literally, we can imagine a variant of the Prisoner’s Dilemma where A defecting gains 1 and costs B 2, and where B defecting gains 3 and costs A 10.
I suppose I meant “Pareto-suboptimal”. Sorry.
How does that make sense? You are correct that under sufficiently generous Coasian assumptions, any attempt at predation will be negotiated into a zero-sum transfer, thus avoiding a negative-sum conflict. But that is still a violation of Pareto optimality, which requires that nobody ends up worse off.
I don’t understand your comment. There can be many Pareto optimal outcomes. For example, “Alice gives Bob a million dollars” is Pareto optimal, even though it makes Alice worse off than the other Pareto optimal outcome where everyone keeps their money.
Yes, this was a confusion on my part. You are right that starting from a Pareto-optimal state, a pure transfer results in another Pareto-optimal state.