Bargaining scholars predict rapid power shifts cause preventive war. But cases with rapidly shifting power often remain peaceful. To explain the dogs that don’t bark, we introduce instant, repeated, costly militarization into Powell’s (1999) conventional-weapons power transition model. First, we rationalize preventive war during long, slow, complete-information power shifts. Second, we find that where past research into conventional shifts predicts war, a grand bargain backed by the decliner’s threat of war emerges as a second equilibrium. Because war and a grand bargain both prevent power from shifting, declining powers deploy them under the same conditions. Our grand bargain survives war-causing hazards, and some latent shifts. It occurs after incremental militarization causes repeated appeasement-like concessions, and when power shifts are instant, slow or fast, and perfectly observed; suggesting conventional shifts induce grand bargains under surprising conditions. The Great Game’s end fits our grand bargain, but that British elites seriously considered war.

We study the problem of how citizens should punish or reward a leader's choices during international crises. Audiences should impose costs rooted in citizens’ preferences over policy outcomes, but that need not mean that these costs directly reflect the citizens’ preferences over actions. Instead, rewards and punishments are valued for their equilibrium consequences. To understand how citizens’ policy preferences shape electoral accountability, we characterize the retention strategies that maximize citizen welfare. In the optimal strategy, citizens always punish leaders who initiate crises and then back down. This is a robust finding, and true even though the citizens have no intrinsic preferences for policy consistency. Whether they punish leaders for backing down rather than going to war, on the other hand, depends on the status quo and on the costs of war. Importantly, these strategies of rewarding and punishing leaders need not have any immediate connection to voter's ex ante preferences over war and peace, even if preferences over policy outcomes ultimately motivate citizen behavior. This has important implications for interpreting empirical and experimental results related to audience costs.

We assess the accuracy of procedural and bargaining models in predicting the outcomes of the reforms of the economic governance of the European Union (EU) that took place between 1997 and 2013. These negotiations were characterized by high costs of failure. We confirm the accuracy and robustness of the compromise model, but a procedural model with a costly reference point performs well, indicating that misestimation of the no-agreement cost may be a reason for its commonly reported poorer accuracy. However, this model is more sensitive to measurement errors. We also show how both models contribute to understanding bargaining success and how the conditional influence of the European Parliament should not be ignored. We conclude by discussing the implications of these results for our understanding of the EU.

Using unique panel data on individual transactions between buyers and sellers in the spot market for live hogs, we found a large degree of intra-day price dispersion. Motivated by this empirical puzzle, we offer an explanation which is rooted in the bargaining with search theory. We formulate three hypotheses involving the role of farmers’ search cost, bargaining parties’ patience, and asymmetric information that we believe can explain the observed phenomenon. Empirical analysis shows strong support for all three of the stated theoretical predictions, indicating that the bargaining with search theory explains at least 31 percent of the observed intra-day price variation in this market.

Chains of reinsurance were first modelled by Gerber, in a special case. It is shown that more general results can be obtained by applying Borch's theorem. The Pareto-optimal reinsurance indemnities are uniquely determined using the only assumption that the participating companies use exponential utility functions. A simple comparison then shows that Gerber's indemnities are not Pareto-optimal. Even if no assumption at all is introduced, the indemnities are shown to be closely linked to the risk aversions of the participants.