Schaller, Zachary; Skaperdas, Stergios - 2019
We examine settings - such as litigation, labor relations, or arming and war - in which players first make non …-contractible up-front investments to improve their bargaining position and gain advantage for possible future conflict. Bargaining is … efficient ex post, but we show that a player may prefer Conflict ex ante if there are sufficient asymmetries in strength. There …