Abstract

In this article, we extend the well-known ‘agreeing-to-disagree’ and ‘no-trade’ results from economics and game theory to international relations. We show that two rational countries should never agree to go to war when war is inefficient and when rationality is common knowledge. We argue that this result might provide one possible explanation for the empirical finding, often referred to as the ‘democratic peace’, that modern democracies rarely go to war with one another. We propose that the informational properties of pluralistic institutions (as opposed to oligarchies or dictatorships) lead to better decision-making by democracies and that democracies are therefore more likely to be the rational actors necessary for the ‘no-war’ result. We discuss empirical evidence in support of this proposition.