%0 Journal Article
%T A Game-Free Microfoundation of Mutual Optimism
%J Games | An Open Access Journal from MDPI
%D 2019
%R https://doi.org/10.3390/g10040037
%X 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¨Cpeace model, we show that, if players neglect the correlation between other players¡¯ actions and their types¡ªa well-established concept in economics¡ªthen players¡¯ expected payoffs from war increase relative to conventional informational sophistication predictions, hence providing a microfoundation of mutual optimism. View Full-Tex
%U https://www.mdpi.com/2073-4336/10/4/37