Give peace a chance: The effect of ownership and asymmetric information on peace

We study the possibility of peace when two countries fight a war over the ownership of a resource. War is always the outcome of the game played by rational countries - under complete or asymmetric information - when there is no pre-established distribution of the resource among countries. When there is such a distribution of the resource, under complete information peace is feasible for some initial distributions of the resource, whereas under asymmetric information there are two classes of equilibria: Peaceful Equilibria, in which peace has a positive probability, and Aggressive Equilibria, which assign probability one to war. Surprisingly, a little asymmetric information may yield war. (C) 2013 Elsevier B.V. All rights reserved.