Peace Through Side Payments

We study strategic bargaining for peaceful settlement before conflict escalates into war (modeled as an all-pay auction), comparing two protocols: offering a take-it-or-leave-it side payment versus requesting one.

Unlike in mediation models, the proposer here can signal private information and influence the opponent's beliefs by varying the payment proposal, which renders the prospect of peace tenuous.

In the bribing model, peace can be implemented through a continuum of bribes but cannot be secured.

Conversely, in the requesting model, peace security is possible, yet it can only be sustained through a single, specific request.