Concessions teach the other side that beligerant attitude is working and producing results. It is this mechanism that strenghten beligerancy, until it looks and feels like war. This rationale is present in many examples in human history of warfare. Here are a couple of them:
- Second World War: Neville Chamberlain, former british prime minister, known for appeasement foreign policy, signed Munich Agreement in 1938, conceding Czechoslovakia to Hitler;
- Gaza War: Israeli troops expelled all citizens from Gaza, conceded the Gaza Strip to non-israeli citizens, and received 8 years of rockets targeted against civilian population, shot by the non-israeli citizens of Gaza.;
Jim Tobins, also awarded the Prize in Economic Sciences in Memory of Alfred Nobel, affirmed that Economics is all about incentives. The logic here is that concessions is translated by the other side as incentives.
Robert J. Aumann discussed about concessions. In his lecture, one man and one woman were deciding whether both she and the man will receive the same ammount, namely 10, or she will receive ten times more, and the man will receive 10 times less.
Man =10
Woman = 10
Or:
Man = 10 / 10 (ten times less) = 1
Woman = 10 x 10 (ten times more) = 100
The man thought to concede to the woman, because of discount rate (%). The ammount of 100 will be close to the ammount of 1 after many cycles of discount rate. It is like keeping your 100 dollars bill for many years. It will be hard for you to buy a chewing gum after all this period of time.
Everybody has his/her own discount rate. Discount rates are based on time. There will be a point in time, that without conceding - thus avoiding war, an equilibrium will be reached without concessions, without war, and this time is sooner than waiting for many years to come.
