Next Article in Journal
Learning (Not) to Evade Taxes
Previous Article in Journal
Emotion and Knowledge in Decision Making under Uncertainty
Previous Article in Special Issue
Electoral Competition with Strategic Disclosure
Open AccessArticle

A Game-Free Microfoundation of Mutual Optimism

Max Planck Institute for Tax Law and Public Finance, Department of Public Economics, Marstallplatz 1, D-80539 München, Germany
Games 2019, 10(4), 37; https://doi.org/10.3390/g10040037
Received: 11 July 2019 / Revised: 21 September 2019 / Accepted: 25 September 2019 / Published: 27 September 2019
(This article belongs to the Special Issue Political Games: Strategy, Persuasion, and Learning)
One of the most widely accepted explanations for why wars occur despite its Pareto-suboptimality is mutual optimism: if both sides expect to gain a lot by fighting, war becomes inevitable. The literature on mutual optimism typically assumes mutually optimistic beliefs and shows that, under such an assumption, war may occur despite its Pareto-suboptimality. In a war–peace model, we show that, if players neglect the correlation between other players’ actions and their types—a well-established concept in economics—then players’ expected payoffs from war increase relative to conventional informational sophistication predictions, hence providing a microfoundation of mutual optimism. View Full-Text
Keywords: mutual optimism; incentives to go to war; information; correlation neglect mutual optimism; incentives to go to war; information; correlation neglect
MDPI and ACS Style

Serena, M. A Game-Free Microfoundation of Mutual Optimism. Games 2019, 10, 37.

Show more citation formats Show less citations formats
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

1
Back to TopTop