With Iris Malone.
Abstract: Many theories of war predict conflict becomes more likely as a state increasingly values the prize at stake. This paper showcases an important limit. If—as in many cases—a state has uncertainty over its opponent’s material cost of fighting, then increasing the opponent’s valuation can decrease the probability of war. Why? Uncertainty condenses the various types’ reservation values, reducing the peace premium, and incentivizing a proposer to make safer offers. We also recover an analogous result under some conditions with uncertainty over power. The results indicate that higher valuations of the prize do not have a clear-cut relationship with the probability of war.