We determine whether and how concessions to an aggressive country by its non-aggressive rival can be used to forestall war in a dynamic environment. In every period, the aggressive country can seize some of non-aggressive country's resources by war. Alternatively, it can wait for the...

How do foreign interests influence the setting of policies by particular countries? What are the implications of such foreign influence? In this paper we develop a theory of foreign influence and apply it to the study of optimal tariffs. We develop a two-country probabilistic voting model of...